LIBRAtY 


HF 

t: 


INTRODUCTION. 


The  papers  and  speeches  contained  in  this  volume 
have  been  used  for  some  years  with  advantage  in  a 
course  on  the  Tariff  History  of  the  United  States, 
conducted  by  the  present  writer  in  Harvard  Univer- 
sity. They  serve  to  illustrate  the  mode  in  which  the 
tariff  problem  has  been  approached  from  time  to  time 
by  great  statesmen,  and  afford  a  stimulating  introduc- 
tion to  a  discussion  of  the  principles  of  international 
trade  and  of  customs  policy.  No  one  of  them  can  be 
said  to  be  very  scarce,  or  'difficult  of  access  to  those 
having  large  libraries  at  command ;  but  some  are  to  be 
found  only  in  the  Congressional  Documents,  and  others 
only  in  expensive  editions  of  the  writings  of  the 
respective  authors.  They  are  now  reprinted  in  the 
hope  that  more  easy  access  to  them  will  be  of  service 
to  teachers  and  students  of  economics,  and  will  bring 
to  the  attention  of  thoughtful  citizens  serious  and 
sober  arguments  removed  from  the  heat  of  contempo- 
rary discussion. 

The  first  paper  on  the  list,  Hamilton's  "  Eeport  on 
Manufactures,"  is  the  most  famous ;  though  doubtless 
it  has  been  referred  to  with  praise  or  blame  by  many 
who  never  succeeded  in  reading  it.  Hamilton  was  re- 
quested to  prepare  the  report  by  resolutions  passed  in 


iv  INTRODUCTION. 

the  House  of  Representatives  in  January,  1790 ;  but 
he  did  not  present  it  until  nearly  two  years  later,  in 
December,  1791.  During  this  period  he  was  busy  with 
the  numberless  questions  of  legislation  and  adminis- 
tration which  confronted  the  newly  organized  federal 
government.  Considering  the  conditions  under  which 
he  thus  wrote,  and  the  stage  which  economic  theory 
had  reached  in  his  time,  the  report  is  a  great  intellec- 
tual feat.  The  marshaling  of  the  opposing  arguments, 
the  tireless  examination  of  every  aspect  of  the  ques- 
tion, the  careful  investigation  of  the  facts  of  industry 
and  trade,  the  specific  recommendations  and  conclu- 
sions at  the  close,  all  bear  the  stamp  of  Hamilton's 
peculiar  and  powerful  intellect.  There  are  repetitions, 
and  some  obvious  inconsistencies  in  arrangement ;  some 
parts  are  obsolete,  referring  to  arguments  or  industrial 
conditions  which  now  belong  to  the  past ;  but  the 
report  remains  the  strongest  presentation  of  the  case 
for  protection  which  has  been  made  by  any  American 
statesman. 

Hamilton's  report  is  printed  in  the  various  editions 
of  his  works,  and  in  the  "  State  Papers  on  finance,"  as 
well  as  in  the  Congres'sional  Documents  ;  but  never- 
theless it  can  hardly  be  said  to  be  easy  of  access  to  the 
ordinary  reader. 

The  second  paper,  Gallatin's  "  Memorial  of  the  Free 
Trade  Convention,"  was  prepared  under  very  different 
circumstances.  In  1831,  when  the  early  protective  con- 
troversy was  at  its  height,  a  convention  of  the  friends 
of  free  trade  was  held  in  Philadelphia.  The  proceed- 
ings were  not  of  any  unusual  character ;  but  on  ad- 
journing,   the   convention   appointed   a   committee,   of 


INTRODUCTION.  V 

which  Gallatin  was  chairman,  to  draft  a  memorial  to 
Congress.  That  memorial,  written  by  Gallatin,  is  the 
docnment  here  reprinted.  Its  authorship,  though  not 
publicly  stated,  was  well  known,  and  led  to  Clay's  bit- 
ter and  discreditable  attack  on  the  aged  statesman.^ 
The  memorial  was  printed  at  the  time  in  the  Congres- 
sional Documents,  and  is  now  most  easily  found  in 
that  form.  A  pamphlet  edition  was  published  in  New 
York,  and  it  was  also  printed  in  Niles's  "  Register " 
and  in  Raguet's  "Banner  of  the  Constitution."  It  is 
not  in  Mr.  Adams's  edition  of  Gallatin's  writings,  and 
on  the  whole  is  less  accessible  than  Hamilton's  report. 

Although  thus  prepared  as  a  private  memorial,  Galla- 
tin's paper  is  written  as  if  presented  to  Congress  by  its 
author  while  still  Secretary  of  the  Treasury.  It  has 
the  dignity  and  the  measured  tone  of  his  State  papers. 
Beginning  with  a  consideration  of  the  revenue  situation 
at  the  time,  it  proceeds  to  a  discussion  of  the  princi- 
ples which  underlie  the  protective  controversy,  and 
ends  with  a  detailed  examination  of  the  tariff  act  then 
in  force,  the  act  of  1828.  Gallatin's  sober  and  saga- 
cious mind  marks  both  the  reasoning  on  the  questions 
of  principle,  and  the  presentation  of  the  facts  of  the 
case  as  they  then  stood.  In  manner  and  matter,  the 
memorial  is  a  model  of  what  a  discussion  of  the  tariff 
question  should  be. 

The  third  document,  Walker's  "  Treasury  Report " 
of  1845,  is  again  a  formal  state  paper,  being  the  re- 
port on  the  finances  submitted  by  the  Secretary  of  the 
Treasury  to  Congress,  at  its  first  meeting  after  the  elec- 
tion of  President  Polk.     It  begins  with  the  usual  state- 

1  !See  Adams's  Life  of  Gallatin,  p.  641. 


VI  INTRODUCTION. 

inents  and  estimates  of  the  revenues  and  expenditures, 
and  then  passes  abruptly  to  a  discussion  of  the  tariff 
question.  It  has  secured  a  place  in  our  tariff  history 
as  a  presentation  of  the  case  against  protection,  com- 
parable in  some  ways  to  the  place  of  Hamilton's  pre- 
sentation of  the  case  against  free  trade.  No  doubt,  it 
is  not  equal  in  intellectu.al  quality  to  Hamilton's  Re- 
port ;  and  it  clearly  falls  below  Gallatin's  memorial  in 
tone  and  in  substance.  But  it  marks  a  new  stage  in 
the  discussion  of  the  tariff  question,  and  deserves  study 
as  one  of  the  famous  public  papers  brought  out  by  that 
question.  It  should  be  read  in  the  light  of  the  tariff' 
act  of  1846,  passed  in  the  course  of  the  session  of  Con- 
gress at  which  it  was  presented.  That  act  was  framed 
largely  at  Walker's  suggestion,  and  its  provisions  give 
an  indication  of  his  meaning  in  some  passages  in  the 
report  which  have  an  uncertain  sound.  The  report  is 
at  present  accessible  only  in  the  Congressional  Docu- 
ments. 

Last  come  the  speeches  of  Clay  and  Webster  on  the 
tariff  act  of  1824.  These  stand  somewhat  apart  fi-oni 
the  other  papers,  and  it  is  not  without  hesitation  that 
they  have  been  selected  from  the  mass  of  orator}?"  on 
the  tariff  question.  But  the  fame  of  the  men,  the 
soberness  of  their  discussion,  taking  place  as  it  did  at 
a  time  when  the  tariff  was  not  yet  an  issue  between 
parties,  and  the  intrinsic  importance  as  well  as  the  his- 
torical interest  of  the  speeches,  seem  to  warrant  their 
being  added  to  this  collection.  In  them,  as  in  the  other 
parts  of  the  volume,  the  reader  will  find  passages  which 
refer  to  conditions  very  different  from  those  of  the 
present,  and  arguments  which  are  no  longer  heard  in 


IN  TR  01)  UC  Tinx.  vii 

the   protective   controversy.      But   these   passages   are 

none  the  less  instructive  for  the  historical  stud}'  of  the 

tariff  question ;  and  in  any  case  it  seemed  best  to  pre- 

se'nt  the  texts  in  all  cases  in  full,  without  attempt  at 

abridgment  or  condensation.     The  speeches  of  Clay  and 

Webster  have  been  reprinted  from  their  collected  writ- 

ings. 

F.  W.  Taussig. 


CONTENTS. 


PAOG 

Introduction iii 

IFamilton's  Report  on  Manufactures 1 

Gallatin's  Memorial  of  the  Free  Trade  Convention         108 

Walker's  Treasury  Report  of  1845 214 

Clay's  Speech  on  the  Tariff  of  1824        ....      252 
Webster's  Speech  on  the  Tariff  of  1824    ....  317 


REPORT   ON   THE   SUBJECT   OF  MANUFAC- 
TURES. 


The  Secretary  of  the  Treasury,  in  obedience  to  the 
order  of  the  House  of  Representatives  of  the  loth  day 
of  January,  1790,  has  applied  his  attention,  at  as  early 
a  period  as  his  other  duties  would  permit,  to  the  sub- 
ject of  manufactures  ;  and  particularly  to  the  means  of 
promoting  such  as  Avill  tend  to  render  the  United  States 
independent  on  foreign  nations  for  military  and  other 
essential  supplies.  And  he  thereupon  respectfully  sub- 
mits the  following  Report :  — 

The  expediency  of  encouraging  manufactures  in  the 
United  States,  wliich  was  not  long  since  deemed  very 
questionable,  appears  at  this  time  to  be  pretty  generally 
admitted.  The  embarrassments  which  have  obstructed 
the  progress  of  our  external  trade  have  led  to  serious  re- 
flections on  the  necessity  of  enlarging  the  sphere  of  our 
domestic  commerce  ;  the  restrictive  regulations,  which 
in  foreign  markets  abridge  the  vent  of  the  increasing 
surplus  of  our  agricultural  produce,  serve  to  beget  an 
earnest  desire  that  a  more  extensive  demand  for  that 
surplus  may  be  created  at  home ;  and  the  complete  suc- 
cess which  has  rewarded  manufacturing  enterprise,  in 
some  valuable  branches,  conspiring  with  the  promising 
symptoms  which  attend  some  less  mature  essays  iu 
others,  justify  a  hope  that  the  obstacles  to  the  growth 
of  this  species  of  industry  are  less  formidable  than  they 
were  apprehended  to  be ;  and  that  it  is  not  difficult  to 
find,  in  its  furtlier  extension,  a  full  indemnification  for 


2  ALEXANDER  HAMILTON. 

any  external  disadvantages  which  are  or  may  be  expe- 
rienced, as  well  as  an  accession  of  resources  favorable 
to  national  independence  and  safety. 

There  still  are,  nevertheless,  respectable  patrons  of 
opinions  unfriendly  to  the  encouragement  of  manufac- 
tures. The  following  are,  substantially,  the  arguments 
by  which  these  opinions  are  defended : 

"In  every  country  (say  those  who  entertain  them), 
agriculture  is  the  most  beneficial  and  productive  object 
of  human  industry.  This  position,  generally,  if  not 
universally  true,  applies  with  peculiar  emphasis  to  the 
United  States,  on  account  of  their  immense  tracts  of 
fertile  territory,  uninhabited  and  unimproved.  Nothing 
can  afford  so  advantageous  an  employment  for  capital 
and  labor,  as  the  conversion  of  this  extensive  wikler- 
ness  into  cultivated  farms.  Nothing  equally  with  this 
can  contribute  to  the  population,  strength,  and  real 
ricthes  of  the  country. 

"  To  endeavor,  by  the  extraordinary  patronage  of 
government,  to  accelerate  the  growth  of  manufactures, 
is  in  fact  to  endeavor,  by  force  and  art,  to  transfer  the 
natural  current  of  industry  from  a  more  to  a  less  bene- 
ficial channel.  Whatever  has  such  a  tendency  must 
necessarily  be  unwise.  Indeed,  it  can  hardly  ever  be 
wise  in  a  government  to  attempt  to  give  a  direction  to 
the  industry  of  its  citizens.  This,  under  the  cpiick- 
sighted  guidance  of  private  interest,  will,  if  left  to  it- 
self, infallibly  find  its  own  way  to  the  most  profitable 
employment ;  and  it  is  by  such  employment  that  the 
public  prosperity  will  be  most  effectually  promoted. 
To  leave  industry  to  itself,  therefore,  is  in  almost  every 
case  the  soundest  as  well  as  the  simplest  policy, 

"  This  policy  is  not  only  recommended  to  the  United 
States  by  considerations  which  affect  all  nations ;  it  is, 
in  a  manner,  dictated  to  them  by  the  imperious  force 
of  a  very  peculiar  situation.     The  smalluess  of  their 


REPORT  ON  MANUFACTURES.  3 

population,  compared  with  their  territory ;  the  constant 
aUurements  to  emigration  from  the  settled  to  the  un- 
settled parts  of  the  country ;  the  facility  with  which 
the  less  independent  condition  of  an  artisan  can  be  ex- 
changed for  the  more  independent  condition  of  a  farmer ; 
these  and  similar  causes  conspire  to  produce,  and  for  a 
length  of  time  must  continue  to  occasion,  a  scarcity  of 
hands  for  manufacturing  occupation,  and  dearness  of 
labor  generally.  To  these  disadvantages  for  the  prose- 
cution of  manufactures,  a  deficiency  of  pecuniary  capi- 
tal being  added,  the  prospect  of  a  successful  competition 
with  the  manufacturers  of  Euroi)e  must  be  regarded  as 
little  less  than  desperate.  Extensive  manufactures  can 
only  be  the  offspring  of  a  redundant,  at  least  of  a  full 
population.  Till  the  latter  shall  characterize  the  situa- 
tion of  this  country,  it  is  vain  to  hope  for  the  former. 

"  If,  contrary  to  the  natural  course  of  things,  an  un- 
seasonable and  premature  spring  can  be  given  to  certain 
fabrics  by  heavy  duties,  prohibitions,  bounties,  or  by 
other  forced  expedients,  this  will  only  be  to  sacrifice 
the  interests  of  the  community  to  those  of  particular 
classes.  Besides  the  misdirection  of  labor,  a  virtual 
monopoly  will  be  given  to  the  persons  employed  on 
such  fabrics,  and  an  enhancement  of  price,  the  inevita- 
ble consequence  of  every  monopoly,  must  be  defrayed 
at  the  expense  of  the  other  parts  of  the  society.  It  is 
far  preferable  that  those  persons  should  be  engaged  in 
the  cultivation  of  the  earth,  and  that  we  should  procure, 
in  exchange  for  its  productions,  the  commodities  with 
which  foreigners  are  able  to  supply  us  in  greater  per- 
fection and  upon  better  terms." 

This  mode  of  reasoning  is  founded  upon  facts  and 
principles  which  have  certainly  respectable  pretensions. 
If  it  had  governed  the  conduct  of  nations  more  gener- 
ally than  it  has  done,  there  is  room  to  suppose  that  it 
might  have  carried  them  faster  to  prosperity  and  great- 


4  ALEXANDER  HAMILTON. 

ness  than  they  have  attained  by  the  pnrsuit  of  maxims 
too  widely  opposite.  Most  general  theories,  however, 
admit  of  numerous  exceptions,  and  there  are  few,  if 
any,  of  the  political  kind,  which  do  not  blend  a  consid- 
erable portion  of  error  with  the  truths  they  inculcate. 

In  order  to  an  accurate  judgment  how  far  that  which 
has  been  just  stated  ought  to  be  deemed  liable  to  a  sim- 
ilar imputation,  it  is  necessary  to  advert  carefully  to 
the  considerations  which  plead  in  favor  of  manufac- 
tures, and  which  appear  to  recommend  the  special  and 
positive  encouragement  of  them  in  certain  cases  and 
under  certain  reasonable  limitations. 

It  ought  readily  to  be  conceded  that  the  cultivation 
of  the  earth  as  the  primary  and  most  certain  source  of 
national  supply ;  as  the  immediate  and  chief  source  of 
subsistence  to  man ;  as  the  principal  source  of  those 
materials  which  constitute  the  nutriment  of  other  kinds 
of  labor ;  as  including  a  state  most  favorable  to  the 
freedom  and  independence  of  the  human  mind,  —  one, 
perhaps,  most  conducive  to  the  multiplication  of  the 
human  species,  —  has  intrinsically  a  strong  claim  to  pre- 
eminence over  every  other  kind  of  industry. 

But  that  it  has  a  title  to  anything  like  an  exclusive 
predilection  in  any  country  ought  to  be  admitted  with 
great  caution.  That  it  is  even  more  productive  than 
every  other  branch  of  industry  requires  more  evidence 
than  has  yet  been  given  in  support  of  the  position. 
That  its  real  interests,  precious  and  important  as  with- 
out the  help  of  exaggeration  they  truly  are,  will  be  ad- 
vanced rather  than  injured  by  the  due  encouragement 
of  manufactures,  may,  it  is  believed,  be  satisfactorily 
demonstrated.  And  it  is  also  believed  that  the  expe- 
diency of  such  encouragement,  in  a  general  view,  may 
be  shown  to  be  recommended  by  the  most  cogent  and 
persuasive  motives  of  national  policy. 

It  has  been  maintained  that  agriculture  is  not  only 


REPORT  ON  MANUFACTURES.  6 

the  most  productive,  but  the  only  productive  species 
of  industry.  The  reality  of  this  suggestion  in  either 
respect  has,  however,  not  been  verified  by  any  accurate 
detail  of  facts  and  calculations,  and  the  general  argu- 
ments, which  are  adduced  to  prove  it,  are  rather  subtile 
and  paradoxical  than  solid  or  convincing. 

Those  which   maintain  its   exclusive  productiveness 
are  to  this  effect :  — 

Labor  bestowed  upon  the  cultivation  of  land  pro- 
duces enough  not  only  to  replace  all  the  necessary  ex- 
penses incurred  in  the  business,  and  to  maintain  the 
persons  who  are  employed  in  it,  but  to  afford,  together 
with  the  ordinary  profit  on  the  stock  or  capital  of  the 
farmer,  a  neat  surplus,  or  rent,  for  the  landlord  or  pro- 
prietor of  the  soil.  But  the  labor  of  artificers  does 
nothing  more  than  replace  the  stock  which  employs 
them,  —  or  which  furnishes  materials,  tools,  and  wages, 
—  and  yield  the  ordinary  profit  upon  that  stock.  It 
yields  nothing  equivalent  to  the  rent  of  land.  Neither 
does  it  add  anything  to  the  total  value  of  the  whole 
annual  produce  of  the  land  and  labor  of  the  country. 
The  additional  value  given  to  those  parts  of  the  pro- 
duce of  land  which  are  wrought  into  manufactures  is 
counterbalanced  by  the  value  of  those  other  parts  of 
that  produce  which  are  consumed  by  the  manufacturers. 
It  can  therefore  only  be  by  saving,  or  parsimony,  not 
by  the  positive  productiveness  of  their  labor,  that  the 
classes  of  artificers  can  in  any  degree  augment  the 
revenue  of  the  society. 

To  this  it  has  been  answered,  — 

1.  '•  That  inasmuch  as  it  is  acknowledged  that  man- 
ufacturing labor  reproduces  a  value  equal  to  that  which 
is  expended  or  consumed  in  carrying  it  on,  and  con- 
tinues in  existence  the  original  stock  or  capital  em- 
ployed, it  ought  on  that  account  alone  to  escape  being 
considered   as   wholly  unproductive.     That   though  it 


6  ALEXANDER  HAMILTON. 

should  be  admitted,  as  alleged,  that  the  consumption  of 
the  produce  of  the  soil  by  the  classes  of  artificers  or 
manufacturers  is  exactly  equal  to  the  value  added  by 
their  labor  to  the  materials  upon  which  it  is  exerted, 
yet  it  would  not  thence  follow  that  it  added  nothing  to 
the  revenue  of  the  society  or  to  the  aggregate  value  of 
the  annual  produce  of  its  land  and  labor.  If  the  con- 
sumption, for  any  given  period,  amoxmted  to  a  given 
sum,  and  the  increased  value  of  the  produce  manufac- 
tured in  the  same  period  to  a  like  sum,  the  total  amount 
of  the  consumption  and  production  during  that  period 
would  be  equal  to  the  two  sums,  and,  consequently, 
double  the  value  of  the  agricultural  produce  consumed. 
And  though  the  increment  of  value  produced  by  the 
classes  of  artificers  should  at  no  time  exceed  the  value 
of  the  produce  of  tlie  land  consumed  by  them,  yet 
there  would  be  at  every  moment,  in  consequence  of 
their  labor,  a  greater  value  of  goods  in  the  market  than 
would  exist  independent  of  it. 

2.  "  That  the  position  that  artificers  can  augment 
the  revenue  of  a  society  only  by  parsimony  is  true  in  no 
other  sense  than  in  one  which  is  equally  applicable  to 
husbandmen  or  cultivators.  It  may  be  alike  affirmed 
of  all  these  classes,  that  the  fund  acquired  by  their 
labor,  and  destined  for  their  support,  is  not,  in  an  ordi- 
nary way,  more  than  equal  to  it.  Aud  hence  it  will 
follow  that  augmentations  of  the  wealth  or  capital  of 
the  community  —  except  in  the  instances  of  some  ex- 
traordinary dexterity  or  skill  —  can  only  proceed,  with 
respect  to  any  of  them,  from  the  savings  of  the  more 
thrifty  and  parsimonious, 

3.  "  That  the  annual  produce  of  the  land  and  labor 
of  a  country  can  only  be  increased  in  two  ways,  —  by 
some  improvement  in  the  productive  powers  of  the  use- 
ful labor  which  actually  exists  within  it,  or  by  some 
increase  in  the  quantity  of  such  labor.    That  with  re- 


REFOBT  ON  MANUFACTURES.  7 

gard  to  the  first,  the  labor  of  artificers  being  capable 
of  greater  subdivision  and  simplicity  of  operation  than 
that  of  cultivators,  it  is  susceptible,  in  a  proportionately 
greater  degree,  of  improvement  in  its  productive  powers, 
whether  to  be  derived  from  an  accession  of  skill  or  from 
the  application  of  ingenious  machinery ;  in  which  par- 
ticular, therefore,  the  labor  employed  in  the  culture  of 
land  can  pretend  to  no  advantage  over  that  engaged  in 
manufactures.  That  with  regard  to  an  augmentation  of 
the  quantity  of  useful  labor,  this  excluding  adventi- 
tious circumstances  must  depend  essentially  upon  an 
increase  of  capital,  which  again  must  depend  upon  the 
savings  made  out  of  the  revenues  of  those  who  furnish 
or  manage  that  which  is  at  any  time  employed,  whether 
in  agriculture,  or  in  manufactures,  or  in  any  other  way." 

But  while  the  exclusive  productiveness  of  agricul- 
tural labor  has  been  thus  denied  and  refuted,  the  su- 
periority of  its  productiveness  has  been  conceded  Avith- 
out  hesitation.  As  this  concession  involves  a  point  of 
considerable  magnitude  in  relation  to  maxims  of  public 
administration,  the  grounds  on  which  it  rests  are 
worthy  of  a  distinct  and  particular  examination. 

One  of  the  arguments  made  use  of  in  support  of  the 
idea  may  be  pronounced  both  quaint  and  superficial. 
It  amounts  to  this,  that  in  the  productions  of  the  soil 
nature  cooperates  with  man,  and  that  the  effect  of  their 
joint  labor  must  be  greater  than  that  of  the  labor  of 
man  alone. 

This,  however,  is  far  from  being  a  necessary  infer- 
ence. It  is  very  conceivable  that  the  labor  of  man  alone, 
laid  out  upon  a  work  requiring  great  skill  and  art  to 
bring  it  to  perfection,  may  be  more  productive  in  value 
than  the  labor  of  nature  and  man  combined  when  di- 
rected towards  more  simple  operations  and  objects. 
And  when  it  is  recollected  to  what  an  extent  the  agency 
of  nature,  in  the  application  of  the  mechanical  powers. 


8  ALEXANDER  HAMILTON. 

is  made  auxiliary  to  the  prosecution  of  manufactures, 
tlie  suggestion  whicli  has  been  noticed  loses  even  the 
appearance  of  plausibility. 

It  might  also  be  observed,  with  a  contrary  view,  that 
the  labor  employed  in  agriculture  is  in  a  great  measure 
periodical  and  occasional,  depending  on  seasons,  and 
liable  to  various  and  long  intermissions,  while  that 
occupied  in  many  manufactures  is  constant  and  regu- 
lar, extending  through  the  year,  embracing,  in  some 
instances,  night  as  well  as  day.  It  is  also  probable 
that  there  are  among  the  cultivators  of  land  more  ex- 
amples of  remissness  than  among  artificers.  The 
farmer,  from  the  peculiar  fertility  of  his  land,  or  some 
other  favorable  circumstance,  may  frequently  obtain  a 
livelihood  even  with  a  considerable  degree  of  careless- 
ness in  the  mode  of  cultivation ;  but  the  artisan  can 
with  difficulty  effect  the  same  object  without  exerting 
himself  pretty  equally  with  all  those  who  are  engaged 
in  the  same  pursuit.  And  if  it  may  likewise  be  as- 
sumed as  a  fact  that  manufactures  open  a  wider  field  to 
exertions  of  ingenuity  than  agriculture,  it  would  not  be 
a  strained  conjecture  that  the  labor  employed  in  the 
former,  being  at  once  more  constant,  more  uniform,  and 
more  ingenious  than  that  which  is  employed  in  the  lat- 
ter, will  be  found,  at  the  same  time,  more  productive. 

But  it  is  not  meant  to  lay  stress  on  observations  of 
this  nature  ;  they  ought  only  to  serve  as  a  counterbal- 
ance to  those  of  a  similar  complexion.  Circumstances 
so  vague  and  general,  as  well  as  so  abstract,  can  afford 
little  instruction  in  a  matter  of  this  kind. 

Another,  and  that  which  seems  to  be  the  principal 
argument  offered  for  the  superior  productiveness  of 
agricultural  labor,  turns  upon  the  allegation  that  labor 
employed  on  manufactures  yields  nothing  equivalent  to 
the  rent  of  land,  or  to  that  neat  surplus,  as  it  is  called, 
which  accrues  to  the  proprietor  of  the  soil. 


REPORT  ON  MANUFACTURES.  9 

But  this  distinction,  important  as  it  has  been  deemed, 
appears  rather  verbal  than  substantial 

It  is  easily  discernible  that  what  in  the  firsl^instance 
is  divided  into  two  parts,  under  the  denominations  of 
the  ordinary  profit  of  the  stock  of  the  farmer  and  rent 
to  the  landlord,  is  in  the  second  instance  united  under 
the  general  appellation  of  the  ordinary  profit  on  the 
stock  of  the  undertaker  ;  and  that  this  formal  or  ver- 
bal distribution  constitutes  the  whole  difference  in  the 
two  cases.  It  seems  to  have  been  overlooked  that  the 
land  is  itself  a  stock  or  capital,  advanced  or  lent  by  its 
owner  to  the  occupier  or  tenant,  and  that  the  rent  he 
receives  is  only  the  ordinary  profit  of  a  certain  stock 
in  land,  not  managed  by  the  proprietor  himself,  but  by 
another  to  whom  he  lends  or  lets  it,  and  who,  on  his 
part,  advances  a  second  capital  to  stock  and  improve 
the  land,  upon  which  he  also  receives  the  usual  profit. 
The  rent  of  the  landlord  and  the  profit  of  the  farmer 
are,  therefore,  nothing  more  than  the  ordinary  profits 
of  two  capitals  belonging  to  two  different  persons,  and 
united  in  the  cultivation  of  a  farm.  As  in  the  other 
case,  the  surplus  which  arises  upon  any  manufactory, 
after  replacing  the  expenses  of  carrying  it  on,  answers 
to  the  ordinary  profits  of  one  or  more  capitals  engaged 
in  the  prosecution  of  such  manufactory.  It  is  said,  one 
or  more  capitals,  because,  in  fact,  the  same  thing  which 
is  contemplated  in  the  case  of  a  farm  sometimes  hap- 
pens in  that  of  a  manufactory.  There  is  one  who  fur- 
nishes a  part  of  the  capital,  or  lends  a  part  of  the 
money,  by  which  it  is  carried  on,  and  another  who  car- 
ries it  on,  with  the  addition  of  his  own  capital.  Out 
of  the  surplus  which  remains,  after  defraying  expenses, 
an  interest  is  paid  to  the  money  lender  for  the  portion 
of  the  capital  furnished  by  him,  which  exactly  agrees 
with  the  rent  paid  to  the  landlord ;  and  the  residue  of 
that  surplus  constitutes  the  profit  of  the  undertaker  or 


10  ALEXANDER  HAMILTON. 

luanufactiirer,  and  agrees  with  what  is  denominated  the 
ordinary  profits  on  the  stock  of  the  farmer.  Both  to- 
gether i^ake  the  ordinary  profits  of  two  capitals  em- 
ployed in  a  manufactory :  as  in  the  other  case  the  rent 
of  the  landlord  and  the  revenue  of  the  farmer  compose 
the  ordinary  profits  of  two  capitals  employed  in  the 
cultivation  of  a  farm. 

The  rent,  therefore,  accruing  to  the  proprietor  of  the 
land,  far  from  being  a  criterion  of  exclusive  produc- 
tiveness, as  has  been  argued,  is  no  criterion  even  of 
superior  productiveness.  The  question  must  still  be 
whether  the  surplus,  after  defraying  expenses  of  a  given 
capital  employed  in  the  purchase  and  improvement  of 
a  piece  of  land,  is  greater  or  less  than  that  of  a  like 
capital  employed  in  the  prosecution  of  a  manufactory, 
or  whether  the  whole  value  produced  from  a  given 
capital  and  a  given  quantity  of  labor  employed  in  one 
way  be  greater  or  less  than  the  whole  value  produced 
from  an  equal  capital  and  an  equal  quantity  of  labor 
employed  in  the  other  way  ;  or  rather,  perhaps,  whether 
the  business  of  agriculture  or  that  of  manufactures  will 
yield  the  greatest  product,  according  to  a  compound 
ratio  of  the  quantity  of  the  capital  and  the  quantity  of 
labor  which  are  employed  in  the  one  or  in  the  other. 

The  solution  of  either  of  these  questions  is  not  easy  ; 
it  involves  numerous  and  complicated  details,  depend- 
ing on  an  accurate  knowledge  of  the  objects  to  be 
compared.  It  is  not  known  that  the  comparison  has 
ever  yet  been  made  upon  sufficient  data  properly  ascer- 
tained and  analyzed.  To  be  able  to  make  it  on  the 
present  occasion  with  satisfactory  precision  would  de- 
mand more  previous  inquiry  and  investigation  than 
there  has  been  hitherto  either  leisure  or  opportunity  to 
accomplish. 

Some  essays,  however,  have  been  made  towards  ac- 
quiring the  requisite   information,  which  have  rather 


REPORT  ON  MANUFACTURES.  11 

served  to  throw  doubt  upon,  than  to  confirm,  the  hy- 
pothesis under  examination.  But  it  ought  to  be  ac- 
knowledged that  they  have  been  too  little  diversified, 
and  are  too  imperfect  to  authorize  a  definitive  conclu- 
sion either  way,  leading  rather  to  probable  conjecture 
than  to  certain  deduction.  They  render  it  probable 
that  there  are  various  branches  of  manufactures  in 
which  a  given  capital  will  yield  a  greater  total  pro- 
duct, and  a  considerably  greater  neat  product,  than  an 
equal  capital  invested  in  the  purchase  and  improve- 
ment of  lands ;  and  that  there  are  also  some  branches 
in  which  both  the  gross  and  the  neat  produce  will  ex- 
ceed that  of  agricultural  industry,  according  to  a  com- 
pound ratio  of  capital  and  labor.  But  it  is  on  this  last 
point  that  there  appears  to  be  the  greatest  room  for 
doubt.  It  is  far  less  difficult  to  infer  generally  that 
the  neat  produce  of  capital  engaged  in  manufacturing 
enterprises  is  greater  than  that  of  capital  engaged  in 
agriculture. 

The  foregoing  suggestions  are  not  designed  to  incul- 
cate an  opinion  that  manufacturing  industry  is  more 
productive  than  that  of  agriculture.  They  are  intended 
rather  to  show  that  the  reverse  of  this  proposition  is 
not  ascertained  ;  that  the  general  arguments  which  are 
brought  to  establish  it  are  not  satisfactory  ;  and,  conse- 
quently, that  a  supposition  of  the  superior  productive- 
ness of  tillage  ought  to  be  no  obstacle  to  listening  to 
any  substantial  inducements  to  the  encouragement  of 
manufactures  which  may  be  otherwise  perceived  to 
exist,  through  an  apprehension  that  they  may  have  a 
tendency  to  divert  labor  from  a  more  to  a  less  profit- 
able employment. 

It  is  extremely  probable  that  on  a  full  and  accurate 
development  of  the  matter,  on  the  ground  of  fact  and 
calculation,  it  would  be  discovered  that  there  is  no  mar 
terial  difference  between  the  aggregate  productiveness 


12  ALEXANDER  HAMILTON. 

of  tlie  one  and  of  the  otlier  kind  of  industry  ;  and  that 
the  propriety  of  the  encouragements,  which  may  in  any 
case  be  proposed  to  be  given  to  either,  ought  to  be  de- 
termined upon  considerations  irrelative  to  any  compar- 
ison of  that  nature. 

II.  But,  without  contending  for  the  superior  produc- 
tiveness of  manufacturing  industry,  it  may  conduce  to 
a  better  judgment  of  the  policy  which  ought  to  be  pur- 
sued respecting  its  encouragement  to  contemplate  the 
subject  under  some  additional  aspects,  tending  not  only 
to  confirm  the  idea  that  this  kind  of  industry  has  been 
improperly  represented  as  unproductive  in  itself,  but  to 
evince,  in  addition,  that  the  establishment  and  diffusion 
of  manufactures  have  the  effect  of  rendering  the  total 
mass  of  useful  and  productive  labor  in  a  community 
greater  than  it  would  otherwise  be.  In  prosecuting  this 
discussion,  it  may  be  necessary  briefly  to  resume  and 
review  some  of  the  topics  which  have  been  already 
touched. 

To  affirm  that  the  labor  of  the  manufacturer  is  un- 
productive because  he  consumes  as  much  of  the  produce 
of  land  as  he  adds  value  to  the  raw  materials  which  he 
manufactures,  is  not  better  founded  than  it  would  be 
to  affirm  that  the  labor  of  the  farmer,  which  furnishes 
materials  to  the  manufacturer,  is  unproductive  because 
he  consumes  an  equal  value  of  manufactured  articles. 
Each  furnishes  a  certain  portion  of  the  produce  of  his 
labor  to  the  other,  and  each  destroys  a  correspondent 
portion  of  the  produce  of  the  labor  of  the  other.  In 
the  mean  time,  the  maintenance  of  two  citizens  instead 
of  one  is  going  on,  the  state  has  two  members  instead 
of  one,  and  they  together  consume  twice  the  value  of 
what  is  produced  from  the  land. 

If,  instead  of  a  farmer  and  artificer,  there  were  a 
farmer  only,  he  would  be  under  the  necessity  of  devot- 
ing a  part  of  his  labor  to  the  fabrication  of  clothing 


REPORT  ON  MANUFACTURES.  13 

and  other  articles,  which  he  would,  procure  of  the  ar- 
tificer, in  the  case  of  there  being  such  a  person,  and  of 
course  he  would  be  able  to  devote  less  labor  to  the  cul- 
tivation of  his  farm,  and  would  draw  from  it  a  propor- 
tionably  less  product.  The  whole  quantity  of  produc- 
tion in  this  state  of  things,  in  provisions,  raw  materials, 
and  manufactures,  would  certainly  not  exceed  in  value 
the  amount  of  what  would  be  produced  in  provisions 
and  raw  materials  only,  if  there  were  an  artificer  as  Well 
as  a  farmer. 

Again,  if  there  were  both  an  artificer  and  a  farmer, 
the  latter  would  be  left  at  liberty  to  pursue  exclusively 
the  cultivation  of  his  farm.  A  greater  quantity  of  pro- 
visions and  raw  materials  would  of  course  be  produced, 
equal  at  least,  as  has  been  already  observed,  to  the 
whole  amount  of  the  provisions,  raw  materials,  and 
manufactures,  which  would  exist  on  a  contrary  suppo- 
sition. The  artificer,  at  the  same  time,  would  be  going 
on  in  the  production  of  manufactured  commodities,  to 
an  amount  sufficient  not  only  to  repay  the  farmer  in 
those  commodities  for  the  provisions  and  materials 
which  were  procured  from  him,  but  to  furnish  the  ar- 
tificer himself  with  a  supply  of  similar  commodities  for 
his  own  use.  Thus,  then,  there  would  be  two  quanti- 
ties or  values  in  existence  instead  of  one,  and  the  reve- 
nue and  consumption  would  be  double  in  Oiie  case  what 
it  would  be  in  the  other. 

If,  in  place  of  both  these  suppositions,  there  were 
supposed  to  be  two  farmers  and  no  artificer,  each  of 
whom  applied  a  part  of  his  labor  to  the  culture  of  land, 
and  another  part  to  the  fabrication  of  manufactures, 
in  this  case  the  portion  of  the  labor  of  both  bestowed 
upon  land  would  produce  the  same  quantity  of  pro- 
visions and  raw  materials  only  as  would  be  produced 
by  the  entire  sum  of  the  labor  of  one  applied  in  the 
same  manner ;   and  the  portion  of  the  labor  of  both 


14  ALEXANDER  HAMILTON. 

bestowed  upon  manufactures  would  produce  the  same 
quantity  of  mamifactures  only  as  would  be  produced 
by  the  entire  sum  of  the  labor  of  one  applied  in  the 
same  manner.  Hence  the  produce  of  the  labor  of  the 
two  farmers  would  not  be  greater  than  the  produce  of 
the  labor  of  the  farmer  and  artificer,  and  hence  it  re- 
sults that  the  labor  of  the  artificer  is  as  positively  pro- 
ductive as  that  of  the  farmer,  and  as  positively  aug- 
ments the  revenue  of  the  society. 

The  labor  of  the  artificer  replaces  to  the  farmer  that 
portion  of  his  labor  with  which  he  provides  the  ma- 
terials of  exchange  with  the  artificer,  and  which  he 
would  otherwise  have  been  compelled  to  apply  to  man- 
ufactures ;  and  while  the  artificer  thus  enables  the 
farmer  to  enlarge  his  stock  of  agricultural  industry,  a 
portion  of  which  he  purchases  for  bis  own  use,  he  also 
supplies  himself  with  the  manufactured  articles  of  which 
he  stands  in  need.  He  does  still  more  :  besides  this 
equivalent  which  he  gives  for  the  portion  of  agricul- 
tural labor  consumed  by  him,  and  this  supply  of  man- 
ufactured commodities  for  his  own  consumption,  he  fur- 
nishes still  a  surplus  which  compensates  for  the  use 
of  the  capital  advanced,  either  by  himself  or  some  other 
person,  for  carrying  on  the  business.  This  is  the  ordi- 
nary profit  of  the  stock  employed  in  the  manufactory, 
and  is  in  every  sense  as  effective  an  addition  to  the 
income  of  the  society  as  the  rent  of  land. 

The  produce  of  the  labor  of  the  artificer,  consequent- 
ly, may  be  regarded  as  composed  of  three  parts,  —  one 
by  which  the  provisions  for  his  subsistence  and  the 
materials  for  his  work  are  purchased  of  the  farmer,  one 
by  which  he  supplies  himself  with  manufactured  neces- 
saries, and  a  third  which  constitutes  the  profit  on  the 
stock  employed.  The  two  last  portions  seem  to  have 
been  overlooked  in  the  system  which  represents  manu- 
facturing industry  as  barren  and  unproductive. 


REPORT  ON  MANUFACTURES.  15 

In  the  course  of  the  preceding  illustrations,  the  j)ro- 
ducts  of  equal  quantities  of  the  labor  of  the  farmer 
and  artificer  have  been  treated  as  if  equal  to  each  other. 
But  this  is  not  to  be  understood  as  intending  to  assert 
any  such  ju-ecise  equality.  It  is  merely  a  manner  of 
expression  adopted  for  the  sake  of  simplicity  and  per- 
spicuity. Whether  the  value  of  the  produce  of  the 
labor  of  the  farmer  be  somewhat  more  or  less  than  that 
of  the  artificer  is  not  material  to  the  main  scope  of  the 
argument,  which  hitherto  has  only  aimed  at  showing 
that  the  one  as  well  as  the  other  occasions  a  positive 
augmentation  of  the  total  produce  and  revenue  of  the 
society. 

It  is  now  proper  to  proceed  a  step  further,  and  to 
enumerate  the  principal  circumstances  from  which  it 
may  be  inferred  that  manufacturing  establishments  not 
only  occasion  a  positive  augmentation  of  the  produce 
and  fevenue  of  the  society,  but  that  they  contribute 
essentially  to  rendering  them  greater  than  they  could 
possibly  be  without  such  establishments.  These  cir- 
cumstances are :  — 

1.  The  division  of  labor. 

2.  An  extension  of  the  use  of  machinery. 

3.  Additional  employment  to  classes  of  the  commu- 
nity not  ordinarily  engaged  in  the  business. 

4.  The  promoting  of  eniigration  from  foreign  coun- 
tries. 

5.  The  furnishing  greater  scope  for  the  diversity  of 
talents  and  dispositions  which  discriminate  men  from 
each  other. 

6.  The  affording  a  more  ample  and  various  field  fur 
enterprise. 

7.  The  creating  in  some  instances  a  new,  and  secur- 
ing in  all  a  more  certain  and  steady  demand  for  the 
surplus  produce  of  the  soil. 

Each  of  these  circumstances  has  a  considerable  inflii- 


16  ALEXANDER  HAMILTON. 

ence  upon  the  totul  mass  of  industrious  effort  in  a  com- 
munity ;  together  they  add  to  it  a  degree  of  energy  and 
effect  which  are  not  easily  conceived.  Some  comments 
upon  each  of  them,  in  the  order  in  which  they  have 
been  stated,  may  serve  to  explain  their  importance. 

1.  As  to  the  division  of  labor. 

It  has  justly  been  observed,  that  there  is  scarcely 
anything  of  greater  moment  in  the  economy  of  a  nation 
than  the  proper  division  of  labor.  The  separation  of 
occupations  causes  each  to  be  carried  to  a  much  greater 
perfection  than  it  could  possibly  acquire  if  they  were 
blended.  This  arises  principally  from  three  circum- 
stances. 

1st.  The  greater  skill  and  dexterity  naturally  result- 
ing from  a  constant  a,nd  undivided  application  to  a  sin- 
gle object.  It  is  evident  that  these  properties  must 
increase  in  proportion  to  the  separation  and  simplifica- 
tion of  objects,  and  the  steadiness  of  the  attention  de- 
voted to  each,  and  must  be  less  in  proportion  to  the 
complication  of  objects  and  the  number  among  which 
the  attention  is  distracted. 

2d.  The  economy  of  time,  by  avoiding  the  loss  of  it, 
incident  to  a  frequent  transition  from  one  operation  to 
another  of  a  different  nature.  This  depends  on  various 
circumstances,  —  the  transition  itself,  the  orderly  dispo- 
sition of  the  implements,  machines,  and  materials  em- 
ployed in  the  operation  to  be  relinquished,  the  prepar- 
atory steps  to  the  commencement  of  a  new  one,  the 
interruption  of  the  impulse  which  the  mind  of  the 
workman  acquires  from  being  engaged  in  a  particular 
operation,  the  distractions,  hesitations,  and  reluctances 
which  attend  the  passage  from  one  kind  of  business  to 
another. 

3d.  An  extension  of  the  use  of  machinery.  A  man 
occupied  on  a  single  object  will  have  it  more  in  his 
power,    and   will   be   more   naturally  led  to  exert   his 


REPORT  ON  MANUFACTURES.  17 

imagination  in  devising  methods  to  facilitate  and 
abridge  labor  than  if  he  were  perplexed  by  a  variety 
of  independent  and  dissimilar  operations.  Besides  this, 
the  fabrication  of  machines  in  numerous  instances  be- 
coming itself  a  distinct  trade,  the  artist  who  follows  it 
has  all  the  advantages  which  have  been  enumerated  for 
improvement  in  his  particular  art,  and,  in  both  ways, 
the  invention  and  application  of  machinery  are  ex- 
tended. 

And  from  these  causes  united,  the  mere  separation 
of  the  occupation  of  the  cultivator  from  that  of  the 
artificer  has  the  effect  of  augmenting  the  productive 
powers  of  labor,  and  with  them  the  total  mass  of  the 
produce  or  revenue  of  a  country.  In  this  single  view 
of  the  subject,  therefore,  the  utility  of  artificers  or  man- 
ufacturers towards  promoting  an  increase  of  productive 
industry  is  apparent. 

2.  As  to  an  extension  of  the  use  of  machinery/,  a  point 
which,  thou(/h  jxirfli/  anticipated,  requires  to  he  placed  in 
one  or  two  additional  lights. 

The  employment  of  machinery  forms  an  item  of  great 
importance  in  the  general  mass  of  national  industry. 
It  is  an  artificial  force  brought  in  aid  of  the  natural 
force  of  man,  and,  to  all  the  purposes  of  labor,  is  an 
increase  of  hands,  an  accession  of  strength,  unincum- 
bered, too,  by  the  expense  of  maintaining  the  laborer. 
May  it  not,  therefore,  be  fairly  inferred  that  those  occu- 
pations which  give  greatest  scope  to  the  use  of  this 
auxiliary  contribute  most  to  the  general  stock  of  indus- 
trious effort,  and,  in  consequence,  to  the  general  product 
of  industry  ? 

It  shall  be  taken  for  granted,  and  the  truth  of  the 
position  referred  to  observation,  that  manufacturing 
pursuits  are  susceptible  in  a  greater  degree  of  the  ap])li- 
cation  of  machinery  than  those  of  agriculture.  If  so, 
all  the  difference  is  lost  to  a  commuinty,  which,  instead 


18  ALEXANDER  HAMILTON. 

of  inaiuifacturing  for  itself,  procures  the  fabrics  requi- 
site to  its  supply  from  other  countries.  The  substitu- 
tion of  foreign  for  domestic  manufactures  is  a  transfer 
to  foreign  nations  of  the  advantages  accruing  from  the 
employment  of  machinery  in  the  modes  in  which  it  is 
capable  of  being  employed  with  most  utility  and  to 
the  greatest  extent. 

The  cotton  mill,  invented  in  England  within  the  last 
twenty  years,  is  a  signal  illustration  of  the  general  prop- 
osition which  has  been  just  advanced.  In  consequence 
of  it  all  the  different  processes  for  spinning  cotton  are 
performed  by  means  of  machines  which  are  put  in  mo- 
tion by  water,  and  attended  chiefly  by  women  and  chil- 
dren, and  by  a  smaller  number  of  jjersons,  in  the  whole, 
than  are  requisite  in  the  ordinary  mode  of  spinning. 
And  it  is  an  advantage  of  great  moment  that  the  oper- 
ations of  this  mill  continue  with  convenience  during 
the  night  as  well  as  through  the  day.  The  prodigious 
effect  of  such  a  machine  is  easily  conceived.  To  this 
invention  is  to  be  attributed  essentially  the  immense 
progress  which  has  been  so  suddenly  made  in  Great 
Britain  in  the  various  fabrics  of  cotton. 

3.  As  to  the  additional  employment  of  classes  of  the 
coinnnunity  not  originally  engaged  in  the  'particular  busi- 
ness. 

This  is  not  among  the  least  valuable  of  the  means 
by  which  manufacturing  institutions  contribute  to  aug- 
ment the  general  stock  of  industry  and  production.  In 
places  where  those  institutions  prevail,  besides  the  per- 
sons regularly  engaged  in  them,  they  afford  occasional 
and  extra  employment  to  industrious  individiials  and 
families  who  are  willing  to  devote  the  leisure  resulting 
from  the  intermissions  of  their  ordinary  pursuits  to  col- 
lateral labors,  as  a  resource  for  multiplying  their  acqui- 
sitions or  their  enjoyments.  The  husbandman  himself 
experiences  a  new  source  of  profit  and  support  from  the 


REPORT  ON  MANUFACTURES.  19 

increased  industry  of  lais  wife  and  daughters,  invited 
and  stimulated  by  the  demands  of  the  neighboring  man- 
ufactories. 

Beside  this  advantage  of  occasional  employment  to 
classes  having  different  occupations,  there  is  another 
of  a  nature  allied  to  it,  and  of  a  similar  tendency. 
This  is  the  employment  of  persons  who  would  other- 
wise be  idle  (and  in  many  cases  a  burden  on  the  com- 
munity), either  from  the  bias  of  temper,  habit,  infirmity 
of  body,  or  some  other  cause,  indisposing  or  disqualify- 
ing them  for  the  toils  of  the  country.  It  is  worthy  of 
particular  remark  that,  in  general,  women  and  children 
are  rendered  more  useful,  and  the  latter  more  early  use- 
ful, by  manufacturing  establishments  than  they  would 
otherwise  be.  Of  the  number  of  persons  employed  in 
the  cotton  manufactories  of  Great  Britain,  it  is  com- 
puted that  four  sevenths  nearly  are  women  and  chil- 
dren, —  of  whom  the  greatest  proportion  are  children, 
and  many  of  them  of  a  tender  age. 

And  thus  it  appears  to  be  one  of  the  attributes  of 
manufactures,  and  one  of  no  small  consequence,  to  give 
occasion  to  the  exertion  of  a  greater  quantity  of  indus- 
try, even  by  the  same  number  of  persons,  where  they 
happen  to  prevail,  than  would  exist  if  there  were  no 
such  establishments. 

4.  As  to  the  2^^'om,oting  of  emigration  from  foreign 
countries. 

Men  reluctantly  quit  one  course  of  occupation  and 
livelihood  for  another,  unless  invited  to  it  by  very  ap- 
parent and  proximate  advantages.  Many  who  would 
go  from  one  country  to  another,  if  they  had  a  prospect 
of  continuing  with  more  benefit  the  callings  to  which 
they  have  been  educated,  will  often  not  be  tempted  to 
change  their  situation  by  the  hope  of  doing  better  in 
some  other  way.  Manufacturers  who,  listening  to  the 
powerful  invitations  of  a  better  price  for  their  fabrics 


20  ALEXANDER  HAMILTON. 

or  their  labor  ;  of  greater  cheapness  of  provisions  and 
raw  materials ;  of  an  exemption  from  the  chief  part  of 
the  taxes,  burdens,  and  restraints  which  they  endure  in 
the  old  world ;  of  greater  personal  independence  and 
consequence  under  the  operation  of  a  more  equal  gov- 
ernment ;  and  of  what  is  far  more  precious  than  mere 
religious  toleration,  a  perfect  equality  of  religious  priv- 
ileges, would  probably  flock  from  Europe  to  the  United 
States  to  pursue  their  own  trades  or  professions,  if 
they  were  once  made  sensible  of  the  advantages  they 
would  enjoy,  and  were  inspired  with  an  assurance  of 
encouragement  and  employment,  will  with  difficulty  be 
induced  to  transplant  themselves  with  a  view  to  be- 
coming cultivators  of  land. 

If  it  be  true,  then,  that  it  is  the  interest  of  the  United 
States  to  open  every  possible  avenue  to  emigration  from 
abroad,  it  affords  a  weighty  argument  for  the  encour- 
agement of  manufactures,  which,  for  the  reasons  just 
assigned,  will  have  the  strongest  tendency  to  multiply 
the  inducements  to  it. 

Here  is  perceived  an  important  resource,  not  only 
for  extending  the  population,  and  with  it  the  useful 
and  productive  labor  of  the  country,  but  likewise  for 
the  prosecution  of  manufactures  without  deducting  from 
the  number  of  hands  which  might  otherwise  be  drawn 
to  tillage,  and  even  for  the  indemnification  of  agricul- 
ture for  such  as  might  happen  to  be  diverted  from  it. 
Many,  whom  manufacturing  views  would  induce  to  emi- 
grate, would  afterwards  yield  to  the  temptations  which 
the  particular  situation  of  this  country  holds  out  to 
agricultural  pursuits.  And  while  agriculture  would  in 
other  respects  derive  many  signal  and  unmingled  ad- 
vantages from  the  growth  of  manufactures,  it  is  a  prob- 
lem whether  it  would  gain  or  lose  as  to  the  article  of 
the  number  of  persons  employed  in  carrying  it  on. 

5.  As  to  the  furnishing  greater  scope  for  the  diversity 


REPORT  ON  MANUFACTURES.  21 

of  talents  and  disjmsitions  which  discriminate  men  from, 
earh  other. 

This  is  a  much  more  powerful  mean  of  augmenting 
the  fund  of  national  industry  than  may  at  first  sight 
appear.  It  is  a  just  observation  that  minds  of  the 
strongest  and  most  active  powers  for  their  proper  ob- 
jects fall  below  mediocrity,  and  labor  without  effect 
if  confined  to  uncongenial  pursuits.  And  it  is  thence 
to  be  inferred  that  the  results  of  human  exertion  may 
be  immensely  increased  by  diversifying  its  objects. 
When  all  the  different  kinds  of  industry  obtain  in  a 
community,  each  individual  can  find  his  proper  element, 
and  can  call  into  activity  the  whole  vigor  of  his  nature. 
And  the  community  is  benefited  by  the  services  of  its 
respective  members  in  the  manner  in  which  each  can 
serve  it  with  most  effect. 

If  there  be  anything  in  a  remark  often  to  be  met 
with,  namely,  that  there  is  in  the  genius  of  the  people 
of  this  country  a  peculiar  aptitude  for  mechanic  im- 
provements, it  would  operate  as  a  forcible  reason  for 
giving  opportunities  to  the  exercise  of  that  species  of 
talent  by  the  propagation  of  manufactures. 

6.  As  to  the  affording  a  more  ample  and  various 
field  for  enterjjrise. 

This  also  is  of  greater  consequence  in  the  general 
scale  of  national  exertion  than  might  perhaps,  on  a  su- 
perficial view,  be  supposed,  and  has  effects  not  alto- 
gether dissimilar  from  those  of  the  circumstance  last 
noticed.  To  cherish  and  stimulate  the  activity  of  the 
human  mind  by  multiplying  the  objects  of  enterprise 
is  not  among  the  least  considerable  of  the  expedients 
l)y  whicli  the  wealth  of  a  nation  may  be  promoted. 
Even  things  in  themselves  not  positively  advantageous 
sometimes  become  so  by  their  tendency  to  provoke  ex- 
ertion. Every  new  scene  which  is  oi)ened  to  the  busy 
nature  of  man  to  rouse  and  exert  itself  is  the  addition 
of  a  new  energy  to  the  general  stock  of  effort. 


22  ALEXANDER  HAMILTON . 

The  spirit  of  enterprise,  useful  and  ])rolific  as  it  is, 
must  necessarily  be  contracted  or  expanded  in  propor- 
tion to  the  sim])licity  or  variety  of  the  occupations  and 
productions  which  are  to  be  found  in  a  society.  It 
must  be  less  in  a  nation  of  mere  cultivators  than  in  a 
nation  of  cultivators  and  merchants,  less  in  a  nation  of 
cultivators  and  merchants  than  in  a  nation  of  cultiva- 
tors, artificers,  and  merchants. 

7.  As  to  the  creathuj,  in  some  instances,  a  new,  and 
serurhuj  in  all  a  more  certain  and  steady  demand,  for  the 
sutyhis  produce  of  the  soil. 

This  is  among  the  most  important  of  the  circum- 
stances which  have  been  indicated.  It  is  a  principal 
mean  by  which  the  establishment  of  manufactures  con- 
tributes to  an  augmentation  of  the  produce  or  revenue 
of  a  country,  and  has  an  immediate  and  direct  relation 
to  the  prosperity  of  agriculture. 

It  is  evident  that  the  exertions  of  the  husbandman 
will  be  steady  or  fluctuating,  vigorous  or  feeble,  in  pro- 
portion to  the  steadiness  or  fluctuation,  adequateness  or 
inadequateness,  of  the  markets  on  which  he  must  de- 
pend for  the  vent  of  the  surplus  which  may  be  pro- 
duced by  his  labor  ;  and  that  such  surplus,  iai  the  or- 
dinary course  of  things,  will  be  greater  or  less  in  the 
same  proportion. 

For  the  purj)ose  of  this  vent,  a  domestic  market  is 
greatly  to  be  preferred  to  a  foreign  one,  because  it  is, 
in  the  nature  of  things,  far  more  to  be  relied  upon. 

It  is  a  primary  object  of  the  policy  of  nations  to  be 
able  to  supply  themselves  with  subsistence  from  their 
own  soils  ;  and  manufacturing  nations,  as  far  as  circum- 
stances permit,  endeavor  to  procure  from  the  same 
source  the  raw  materials  necessary  for  their  own  fab- 
rics. This  disj)osition,  urged  by  the  s})irit  of  monopoly, 
is  sometimes  even  carried  to  an  injudicious  extreme. 
It  seems  not  always  to  be  recollected  that  nations  who 


REPORT  ON  MANUFACTURES.  23 

have  neither  mines  nor  niannfaetnres  can  only  obtain 
the  manufactnred  articles  of  which  they  stand  in  need 
by  an  exchange  of  the  products  of  their  soils  ;  and  that 
if  those  who  can  best  fnrnish  them  with  such  articles 
are  unwilling  to  give  a  due  course  to  this  exchange, 
they  must  of  necessity  make  every  possible  effort  to 
manufacture  for  themselves  ;  the  effect  of  which  is, 
that  the  manufacturing  nations  abridge  the  natural 
advantages  of  their  situation  through  an  unwillingness 
to  permit  the  agricultural  countries  to  enjoy  the  ad- 
vantages of  theirs,  and  sacrifice  the  interests  of  a  mu- 
tually beneficial  intercourse  to  the  vain  project  of  selling 
everything  and  buying  nothing. 

But  it  is  also  a  consequence  of  the  policy  which  has 
been  noted,  that  the  foreign  demand  for  the  products 
of  agricultural  countries  is  in  a  great  degree  rather 
casual  and  occasional  than  certain  or  constant.  To 
what  extent  injurious  interruptions  of  the  demand  for 
some  of  the  staple  commodities  of  the  United  States 
may  have  been  experienced  from  that  cause  must  be 
referred  to  the  judgment  of  those  who  are  engaged  in 
carrying  on  the  commerce  of  the  country  ;  but  it  may 
be  safely  affirmed  that  such  interruptions  are  at  times 
very  inconveniently  felt,  and  that  cases  not  unf requently 
occur  in  which  markets  are  so  confined  and  restricted 
as  to  render  the  demand  very  unequal  to  the  supply. 

Independently,  likewise,  of  the  artificial  impediments 
which  are  created  by  the  policy  in  question,  there  are 
natural  causes  tending  to  render  the  external  demand 
for  the  surplus  of  agricultural  nations  a  precarious  re- 
liance. The  differences  of  seasons  in  the  countries 
which  are  the  consumers  make  immense  differences  in 
the  produce  of  their  own  soils  in  different  years,  and, 
consequently,  in  the  degrees  of  their  necessity  for  for- 
eign supply.  Plentiful  harvests  with  them,  especially 
if  similar  ones  occur  at  the  same  time  in  the  countries 


24  ALEXANDER  HAMILTON. 

which  are  the  furnishers,  occasion  of  course  a  glut  in 
the  markets  of  the  latter. 

Considering  how  fast  and  how  much  the  progress  of 
new  settlements  in  the  United  States  must  increase  the 
surplus  produce  of  the  soil,  and  weighing  seriously  the 
tendency  of  the  system  which  prevails  among  most  of 
the  commercial  nations  of  Europe,  whatever  dependence 
may  be  placed  on  the  force  of  natural  circumstances  to 
counteract  the  effects  of  an  artificial  policy,  there  ap- 
pear strong  reasons  to  regard  the  foreign  demand  for 
that  surplus  as  too  uncertain  a  reliance,  and  to  desire 
a  substitute  for  it  in  an  extensive  domestic  market. 

To  secure  such  a  market  there  is  no  other  expedient 
than  to  promote  manufacturing  establishments.  Man- 
ufacturers, Avho  constitute  the  most  numerous  class 
after  the  cultivators  of  land,  are  for  that  reason  the 
principal  consumers  of  the  surplus  of  their  labor. 

This  idea  of  an  extensive  domestic  market  for  the 
surplus  produce  of  the  soil  is  of  the  first  consequence. 
It  is,  of  all  things,  that  which  most  effectually  conduces 
to  a  flourishing  state  of  agriculture.  If  the  effect  of 
manufactories  should  be  to  detach  a  portion  of  the 
hands,  which  would  otherwise  be  engaged  in  tillage,  it 
might  possibly  cause  a  smaller  quantity  of  lands  to  be 
under  cultivation ;  but  by  their  tendency  to  procure  a 
more  certain  demand  for  the  surplus  produce  of  the 
soil,  they  would  at  the  same  time  cause  the  lands 
which  were  \n  cultivation  to  be  better  improved  and 
more  productive.  And  while,  by  their  influence,  the 
condition  of  each  individual  farmer  would  be  amelio- 
rated, the  total  mass  of  agricultural  production  would 
probably  be  increased.  For  this  must  evidently  depend 
as  much  upon  the  degree  of  improvement,  if  not  more, 
than  upon  the  number  of  acres  under  culture. 

It  merits  particular  observation  that  the  multiplica- 
tion of  manufactories  not  only  furnishes  a  market  for 


REPORT  ON  MANUFACTURES.  25 

those  articles  wliieli  have  been  accustomed  to  be  pro- 
duced in  abundance  in  a  country,  but  it  likewise  creates 
a  demand  for  such  as  were  either  unknown  or  produced 
in  inconsiderable  quantities.  The  bowels  as  well  as 
the  surface  of  the  earth  are  ransacked  for  articles 
which  were  before  neglected.  Animals,  plants,  and 
minerals  acquire  an  utility  and  value  which  were  be- 
fore unexplored. 

The  foregoing  considerations  seem  sufficient  to  es- 
tablish, as  general  propositions,  that  it  is  the  interest 
of  nations  to  diversify  the  industrious  pursuits  of  the 
individuals  who  compose  them  ;  that  the  establishment 
of  manufactures  is  calculated  not  only  to  increase 
the  general  stock  of  useful  and  productive  labor,  but 
even  to  improve  the  state  of  agriculture  in  particular ; 
certamly  to  advance  the  interests  of  those  who  are  en- 
gaged in  it.  There  are  other  views  that  will  be  here- 
after taken  of  the  subject  which,  it  is  conceived,  will 
serve  to  confirm  these  inferences. 

III.  Previously  to  a  further  discussion  of  the  objec- 
tions to  the  encouragement  of  manufactures,  which  have 
been  stated,  it  will  be  of  use  to  see  what  can  be  said 
in  reference  to  the  particular  situation  of  the  United 
States  against  the  conclusions  appearing  to  result  from 
what  has  been  already  offered. 

It  may  be  observed,  and  the  idea  is  of  no  inconsider- 
able weight,  that  however  true  it  might  be  that  a  state 
which,  possessing  large  tracts  of  vacant  and  fertile  ter- 
ritory, was  at  the  same  time  secluded  from  foreign  com- 
merce, would  find  its  interest  and  the  interest  of  agri- 
culture in  diverting  a  part  of  its  population  from  tillage 
to  manufactures  ;  yet  it  will  not  follow  that  the  same 
is  true  of  a  state  which,  having  such  vacant  and  fertile 
territory,  has  at  the  same  time  ample  opportunity  of 
procuring  from  abroad,  on  good  terms,  all  the  fabrics 
of  which  it  stands  in  need  for  the  supply  of  its  inhab- 


26  ALEXANDER  HAMILTON. 

itants.  The  poAvcr  of  doini,'  tliis,  at  least,  secures  the 
great  advantage  of  a  division  of  labor,  leaving  the  farmer 
free  to  pursue  exclusively  the  culture  of  his  land,  and 
enabling  him  to  procure  with  its  products  the  manufac- 
tured supplies  requisite  either  to  his  wants  or  to  his 
enjoyments.  And  though  it  should  be  true  that  in 
settled  countries  the  diversification  of  industry  is  con- 
ducive to  an  increase  in  the  productive  powers  of  labor, 
and  to  an  augmentation  of  revenue  and  capital,  yet  it 
is  scarcely  conceivable  that  there  can  be  anything  of  so 
solid  and  permanent  advantage  to  an  uncultivated  and 
unpeopled  country  as  to  convert  its  wastes  into  culti- 
vated and  inhabited  districts.  If  the  revenue,  in  the 
mean  time,  should  be  less,  the  capital  in  the  event  must 
be  greater. 

To  these  observations  the  following  appears  to  be  a 
satisfactory  answer  :  — 

1.  If  the  system  of  perfect  liberty  to  industry  and 
commerce  were  the  prevailing  system  of  nations,  the 
arguments  which  dissuade  a  country  in  the  predicament 
of  the  United  States  from  the  zealous  pursuit  of  man- 
ufactures would,  doubtless,  have  great  force.  It  will 
not  be  affirmed  that  they  might  not  be  permitted,  with 
few  exceptions,  to  serve  as  a  rule  of  national  condiict. 
In  such  a  state  of  things  each  country  would  have  the , 
full  benefit  of  its  peculiar  advantages  to  compensate 
for  its  deficiencies  or  disadvantages.  If  one  nation 
were  in  a  condition  to  supply  manufactured  articles  on 
better  terms  than  another,  that  other  might  find  an 
abundant  indemnification  in  a  superior  capacity  to  fur- 
nish the  produce  of  the  soil.  And  a  free  exchange, 
mutually  beneficial,  of  the  commodities  which  each  was 
able  to  supply  on  the  best  terms  might  be  carried  on 
between  them,  supporting  in  full  vigor  the  industry 
of  each.  And  though  the  circumstances  which  have 
been  mentioned,  and  others  which  will  be  unfolded  here- 


BEPORT  ON  MANUFACTURES.  27 

after,  render  it  probable  that  nations  merely  agricultural 
would  not  enjoy  the  same  degree  of  opulence,  in  pro- 
portion to  their  numbers,  as  those  which  united  manu- 
factures with  agriculture  ;  yet  the  progressive  improve- 
ment of  the  lands  of  the  former  might,  in  the  end, 
atone  for  an  inferior  degree  of  opulence  in  th.e  mean 
time,  and,  in  a  case  in  which  ojiposite  considerations 
are  pretty  equally  balanced,  the  option  ought  perhaps 
always  to  be  in  favor  of  leaving  industry  to  its  own 
direction. 

But  the  system  which  has  been  mentioned  is  far  from 
characterizing  the  general  policy  of  nations.  The  pre- 
valent one  has  been  regulated  by  an  opposite  spirit. 
The  consequence  of  it  is  that  the  United  States  are,  to 
a  certain  extent,  in  the  situation  of  a  country  precluded 
from  foreign  commerce.  They  can  indeed,  without  diffi- 
culty, obtain  from  abroad  the  manufactured  supplies  of 
which  they  are  in  want,  but  they  experience  numerous 
and  very  injurious  impediments  to  the  emission  and 
vent  of  their  own  commodities.  Nor  is  this  the  case 
in  reference  to  a  single  foreign  nation  only.  The  regu- 
lations of  several  countries,  with  which  we  have  the 
most  extensive  intercourse,  throw  serious  obstructions 
in  the  way  of  the  principal  staples  of  the  United 
States. 

In  such  a  position  of  things  the  United  States  can- 
not exchange  with  Europe  on  equal  terms,  and  the 
want  of  reciprocity  would  render  them  the  victim  of  a 
system  which  should  induce  them  to  confine  their  views 
to  agriculture,  and  refrain  from  manufactures.  A  con- 
stant and  increasing  necessity,  on  their  part,  for  the 
commodities  of  Europe,  and  only  a  partial  and  occa- 
sional demand  for  their  own  in  return,  could  not  but 
expose  them  to  a  state  of  impoverishment  com])ared 
with  the  opulence  to  wliich  their  political  and  natural 
advantages  authorize  tliem  to  aspire. 


28  ALEXANDER  HAMILTON. 

Remarks  of  this  kind  are  not  made  in  the  spirit  of 
comphiint.  It  is  for  the  nations,  whose  regulations  are 
alluded  to,  to  judge  for  themselves,  whether,  by  aiming 
at  too  much,  they  do  not  lose  more  than  tliey  gain.  It 
is  for  the  United  States  to  consider  by  what  means 
they  can  render  themselves  least  dependent  on  the  com- 
binations, right  or  wrong,  of  foreign  policy. 

It  is  no  small  consolation  that  already  the  measures 
which  have  embarrassed  our  trade  have  accelerated  in- 
ternal improvements,  Avliich,  upon  the  whole,  have  bet- 
tered our  affairs.  To  diversify  and  extend  these  im- 
provements is  the  surest  and  safest  method  of  indemni- 
fying ourselves  for  any  inconveniences  which  those  or 
similar  measures  have  a  tendency  to  beget.  If  Europe 
will  not  take  from  us  the  products  of  our  soil  upon 
terms  consistent  with  our  interest,  the  natural  remedy 
is  to  contract,  as  fast  as  possible,  our  wants  of  her. 

2.  The  conversion  of  their  waste  into  cultivated 
lands  is  certainly  a  point  of  great  moment  in  the  po- 
litical calculations  of  the  United  States.  But  the  de- 
gree in  which  this  may  possibly  be  retarded  by  the 
encouragement  of  manufactories  does  not  appear  to 
countervail  the  powerful  inducements  to  affording  that 
encouragement. 

An  observation  made  in  another  place  is  of  a  nature 
to  have  great  influence  upon  this  question.  If  it  can- 
not be  denied  that  the  interests  even  of  agriculture  may 
be  advanced  more  by  having  such  of  the  lands  of  a 
State  as  are  occupied  under  good  cultivation  than  by 
having  a  greater  quantity  occupied  xmder  a  much  in- 
ferior cultivation,  and  if  manufactories,  for  the  reasons 
assigned,  must  be  admitted  to  liave  a  tendency  to  pro- 
mote a  more  steady  and  vigorous  cultivation  of  the 
lands  occupied  than  would  happen  without  them,  it  will 
follow  that  they  are  capable  of  indemnifying  a  country 
for  a  dimimxtion  of  the  progress  of   new  settlements, 


liEPORT  ON  MANUFACTURES.  29 

and  may  serve  to  increase  both  the  capital  value  and 
the  income  of  its  lands,  even  though  they  should  abridge 
the  number  of  acres  under  tillage. 

But  it  does  by  no  means  follow  that  the  progress  of 
new  settlements  would  be  retarded  by  the  extension  of 
manufactures.  The  desire  of  being  an  independent 
proprietor  of  land  is  founded  on  such  strong  principles 
in  the  human  breast,  that  where  the  opportunity  of 
becoming  so  is  as  great  as  it  is  in  the  United  States, 
the  proportion  will  be  small  of  those  whose  situations 
would  otherwise  lead  to  it  who  would  be  diverted  from 
it  towards  manufactures.  And  it  is  highly  probable, 
as  already  intimated,  that  the  accessions  of  foreigners 
who,  originally  drawn  over  by  manufacturing  views, 
would  afterwards  abandon  them  for  agricultural,  would 
be  more  than  an  equivalent  for  those  of  our  own  citi- 
zens who  might  happen  to  be  detached  from  them. 

The  remaining  objections  to  a  particular  encourage- 
ment of  manufactures  in  the  United  States  now  re- 
quire to  be  examined. 

One  of  these  turns  on  the  proposition  that  industry, 
if  left  to  itself,  will  naturally  find  its  way  to  the  most 
useful  and  profitable  employment.  Whence  it  is  in- 
ferred that  manufactures,  without  the  aid  of  govern- 
ment, will  grow  up  as  soon  and  as  fast  as  the  natural 
state  of  things  and  the  interest  of  the  community  may 
require. 

Against  the  solidity  of  this  hypothesis,  in  the  full 
latitude  of  the  terms,  very  cogent  reasons  may  be  of- 
fered. These  have  relation  to  the  strong  influence  of 
habit,  and  the  spirit  of  imitation,  the  fear  of  want  of 
success  in  untried  enterprises,  the  intrinsic  difficulties 
incident  to  first  essays  towards  a  competition  with 
those  who  have  previously  attained  to  perfection  in  the 
business  to  be  attempted  ;  the  bounties,  premiums,  and 
other  artificial  encouragements  with  which  foreign  na- 


30  ALEXANDER  HAMILTON. 

tions  second  the  exertions  of  their  oavu  citizens  in  the 
branches  in  which  they  are  to  be  rivaled. 

Experience  teaches  that  men  are  often  so  much  gov- 
erned by  what  they  are  accustomed  to  see  and  practice, 
that  the  simplest  and  most  obvious  improvements  in 
the  most  ordinary  occujDations  are  adopted  with  hesi- 
tation, reluctance,  and  by  slow  gradations.  The  spon- 
taneous transition  to  new  pursuits  in  a  community  long 
habituated  to  different  ones  may  be  expected  to  be  at- 
tended Avith  proportionably  greater  difficulty.  When 
former  occupations  ceased  to  yield  a  profit  adequate  to 
the  subsistence  of  their  followers,  or  when  there  was 
an  absolute  deficiency  of  employment  in  them,  owing 
to  the  superabundance  of  hands,  changes  would  ensue  ; 
but  these  changes  would  be  likely  to  be  more  tardy 
than  might  consist  with  the  interest  either  of  indi- 
viduals or  of  the  society.  In  many  cases  they  would 
not  happen,  while  a  bare  support  could  be  insured  by 
an  adherence  to  ancient  courses,  though  a  resort  to  a 
more  profitable  employment  might  be  practicable.  To 
produce  the  desirable  changes  as  early  as  may  be  ex- 
pedient may,  therefore,  require  the  incitement  and  pa- 
tronage of  government. 

The  apprehension  of  failing  in  new  attempts  is,  per- 
haps, a  more  serious  impediment.  There  are  disposi- 
tions apt  to  be  attracted  by  the  mere  novelty  of  an 
undertaking,  but  these  are  not  always  those  best  cal- 
culated to  give  it  success.  To  this  it  is  of  importance 
that  the  confidence  of  cautious,  sagacious  capitalists, 
both  citizens  and  foreigners,  should  be  excited.  And 
to  inspire  this  description  of  persons  with  confidence,  it 
is  essential  that  they  should  be  made  to  see  in  any 
project  which  is  new,  and  for  that  reason  alone,  if  for 
no  other,  precarious,  the  prospect  of  such  a  degree  of 
countenance  and  support  from  government  as  may  be 
capable  of  overcoming  the  obstacles  inseparable  from 
first  experiments. 


REPORT  ON  MANUFACTURES.  31 

The  superiority  antecedently  enjoyed  by  nations  who 
have  preoccupied  and  })erfected  a  branch  of  industry 
constitutes  a  more  formidable  obstacle  than  either  of 
tliose  which  have  been  mentioned  to  the  introduction 
cf  the  same  branch  into  a  country  in  which  it  did  not 
before  exist.  To  maintain  between  the  recent  estab- 
lishments of  one  country  and  the  long  matured  estab- 
lishments of  another  country  a  competition  upon  equal 
terms,  both  as  to  quality  and  price,  is  in  most  cases 
impracticable.  The  disparity  in  the  one,  or  in  the 
other,  or  in  both,  must  necessarily  be  so  considerable 
as  to  forbid  a  successful  rivalship  without  the  extraor- 
dinary aid  and  protection  of  government. 

But  the  greatest  obstacle  of  all  to  the  successful  pro- 
secution of  a  new  branch  of  industry,  in  a  country  in 
which  it  was  before  unknown,  consists,  as  far  as  the 
instances  apply,  in  the  bounties,  premiums,  and  other 
aids  which  are  granted  in  a  variety  of  cases  by  the  na- 
tions in  which  the  establishments  to  be  imitated  are 
previously  introduced.  It  is  well  known  —  and  partic- 
ular examples  in  the  course  of  this  report  will  be  cited 
—  that  certain  nations  grant  bounties  on  the  exporta- 
tion of  particular  commodities  to  enable  their  own 
workmen  to  undersell  and  supplant  all  competitors  in 
the  countries  to  which  those  commodities  are  sent. 
Hence  the  undertakers  of  a  new  manufacture  have  to 
contend  not  only  with  the  natural  disadvantages  of  a 
new  undertaking,  but  with  the  gratuities  and  remunera- 
tions which  other  governments  bestow.  To  be  enabled 
to  contend  with  success,  it  is  evident  that  the  interfer- 
ence and  aid  of  their  own  governments  are  indispensa- 
ble. 

Combinations  by  those  engaged  in  a  particular  branch 
of  business  in  one  country  to  frustrate  the  first  efforts 
to  introduce  it  into  another  by  temporary  sacrifices, 
recompensed,    perhaps,    by  extraordinary    indemnifica- 


32  ALEXANDER  HAMILTON. 

tions  of  the  government  of  such  country,  are  believed 
to  have  existed,  and  are  not  to  be  regarded  as  destitute 
of  probability.  The  existence  or  assurance  of  aid  from 
the  government  of  the  country,  in  which  the  business 
is  to  be  introduced,  may  be  essential  to  fortify  adven- 
turers against  the  dread  of  such  combinations,  —  to  de- 
feat their  effects,  if  formed,  and  to  prevent  their  being 
formed  by  demonstrating  that  they  must,  in  the  end, 
prove  fruitless. 

Whatever  room  there  may  be  for  an  expectation 
that  the  industry  of  a  people,  under  the  direction  of 
private  interest,  will  upon  equal  terms  find  out  the  most 
beneficial  employment  for  itself,  there  is  none  for  a 
reliance  that  it  will  struggle  against  the  force  of  un- 
equal terms,  or  will  of  itself  surmount  all  the  adven- 
titious barriers  to  a  successful  competition,  which  may 
have  been  erected  either  by  the  advantages  naturally 
acquired  by  practice  and  previous  possession  of  the 
ground,  or  by  those  which  may  have  sprung  from  posi- 
tive regulations  and  an  artificial  policy.  This  general 
reflection  might  alone  suffice  as  an  answer  to  the  ob- 
jection under  examination,  exclusively  of  the  weighty 
considerations  which  have  been  particularly  urged. 

The  objections  to  the  pursuit  of  manufactures  in  the 
United  States,  which  next  present  themselves  to  dis- 
cussion, represent  an  impracticability  of  success  arising 
from  three  causes  :  scarcity  of  hands,  dearness  of  labor, 
want  of  cajDital. 

The  two  first  circumstances  are  to  a  certain  extent 
real,  and  within  due  limits  ought  to  be  admitted  as  ob- 
stacles to  the  success  of  manufacturing  enterprise  in 
the  United  States.  But  there  are  various  considera- 
tions which  lessen  their  force,  and  tend  to  afford  an 
assurance  that  they  are  not  sufficient  to  prevent  the 
advantageous  prosecution  of  many  very  useful  and  ex- 
tensive manufactories. 


REPORT  ON  MANUFACTURES.  33 

With  regard  to  scarcity  of  hands,  the  fact  itself  must 
be  applied  with  no  small  qualification  to  certain  parts 
of  the  United  States.  There  are  large  districts  which 
may  be  considered  as  pretty  fully  peopled,  and  which, 
notwithstanding  a  continual  drain  for  distant  settle- 
ment, are  thickly  interspersed  with  flourishing  and  in- 
creasing towns.  If  these  districts  have  not  already 
reached  the  point  at  which  the  complaint  of  scarcity 
of  hands  ceases,  they  are  not  remote  from  it,  and  are 
approaching  fast  towards  it.  And  having  perhaps 
fewer  attractions  to  agriculture  than  some  other  parts 
of  the  Union,  they  exhibit  a  proportionably  stronger 
tendency  towards  other  kinds  of  industry.  In  these 
districts  may  be  discerned  no  inconsiderable  maturity 
for  manufacturing  establishments. 

But  there  are  circumstances  which  have  been  already 
noticed  with  another  view,  that  materially  diminish 
everywhere  the  effect  of  a  scarcity  of  hands.  These 
circumstances  are  :  the  great  use  which  can  be  made  of 
women  and  children,  on  which  point  a  very  pregnant 
and  instrtictive  fact  has  been  mentioned ;  the  vast  ex- 
tension given  by  late  improvements  to  the  employment 
of  machines,  which,  substituting  the  agency  of  fire  and 
water,  has  prodigiously  lessened  the  necessity  for  man- 
ual labor ;  the  employment  of  persons  ordinarily  en- 
gaged in  other  occupations  during  the  seasons  or  hours 
of  leisure,  which,  besides  giving  occasion  to  the  exer- 
tion of  a  greater  quantity  of  labor  by  the  same  number 
of  persons,  and  thereby  increasing  the  general  stock  of 
labor,  as  has  elsewhere  been  remarked,  may  also  be 
taken  into  the  calculation  as  a  resource  for  obviating 
the  scarcity  of  hands ;  lastly,  the  attraction  of  foreign 
emigrants.  Whoever  inspects  with  a  careful  eye  the 
composition  of  our  towns,  will  be  made  sensible  to  what 
an  extent  this  resource  may  be  relied  upon.  This  ex- 
hibits a  large  proportion  of  ingenious  and  valuable  work- 


34  ALEXANDER  HAMILTON. 

iiu'ii  in  (liFferent  arts  and  trades,  who,  by  expatriating 
from  Europe,  have  improved  their  own  condition  and 
added  to  the  industry  and  wealth  of  the  United  States. 
It  is  a  natural  inference  from  the  experience  we  have 
already  had,  that  as  soon  as  the  United  States  shall 
present  the  countenance  of  a  serious  prosecution  of 
manufactures,  as  soon  as  foreign  artists  shall  be  made 
sensible  that  the  state  of  things  here  affords  a  moral 
certainty  of  employment  and  encouragement,  competent 
numbers  of  European  workmen  will  transplant  them- 
selves effectually  to  insure  the  success  of  the  design. 
How  indeed  can  it  otherwise  happen,  considering  the 
various  and  powerful  inducements  which  the  situation 
of  this  country  offers  ;  addressing  themselves  to  so 
many  strong  passions  and  feelings,  to  so  many  general 
and  particular  interests  ? 

It  may  be  affirmed,  therefore,  in  respect  to  hands  for 
carrying  on  manufactures,  that  we  shall  in  a  great 
measure  trade  upon  a  foreign  stock,  reserving  our  own 
for  the  cultivation  of  our  lands  and  the  manning  of  our 
ships,  as  far  as  character  and  circumstances  shall  in- 
cline. It  is  not  unworthy  of  remark,  that  the  objection 
to  the  success  of  manufactures  deduced  from  the  scar- 
city of  hands,  is  alike  ajiplieable  to  trade  and  naviga- 
tion, and  yet  these  are  perceived  to  flourish,  without 
any  sensible  impediment  from  that  cause. 

As  to  the  dearness  of  labor  (another  of  the  obstacles 
alleged),  this  has  relation  principally  to  two  circum- 
stances :  one,  that  which  has  been  just  discussed,  or  the 
scarcity  of  hands ;  the  other,  the  greatness  of  profits. 

As  far  as  it  is  a  consequence  of  the  scarcity  of  hands, 
it  is  mitigated  by  all  the  considerations  which  have 
been  adduced  as  lessening  that  deficiency.  It  is  certain, 
too,  that  the  disparity  in  this  respect  between  some  of 
the  most  manufacturing  parts  of  Europe  and  a  large 
proportion  of  the  United  States  is  not  nearly  so  great 


BE  PORT  ON  MANUFACTURES.  36 

as  is  commonly  imagined.  It  is  also  much  less  in  re- 
gard to  artificers  and  manufacturers  than  in  regard  to 
country  laborers  ;  and  while  a  careful  comparison  shows 
that  there  is  in  this  particular  much  exaggeration,  it  is 
also  evident  that  the  effect  of  the  degree  of  disparity 
which  does  truly  exist  is  diminished  in  proportion  to 
the  use  which  can  be  made  of  machinery. 

To  illustrate  this  last  idea  :  let  it  be  supposed  that 
the  difference  of  price  in  two  countries  of  a  given  quan- 
tity of  manual  labor  requisite  to  the  fabrication  of  a 
given  article  is  as  ten,  and  that  some  mechanic  power 
is  introduced  into  both  countries  which,  performing  half 
the  necessary  labor,  leaves  only  half  to  be  done  by 
hand,  it  is  evident  that  the  difference  in  the  cost  of  the 
fabrication  of  the  article  in  question  in  the  two  coun- 
tries, as  far  as  it  is  connected  with  the  price  of  labor, 
will  be  reduced  from  ten  to  five  in  consequence  of  the 
introduction  of  that  power. 

This  circumstance  is  worthy  of  the  most  particidar 
attention.  It  diminishes  immensely  one  of  the  objec- 
tions most  strenuously  urged  against  the  success  of 
manufactures  in  the  United  States. 

To  procure  all  such  machines  as  are  known  in  any 
part  of  Euro])e  can  only  require  a  proper  provision  and 
due  pains.  The  knowledge  of  several  of  the  most  im- 
portant of  them  is  already  possessed.  The  preparation 
of  them  here  is  in  most  cases  practicable  on  nearly 
equal  terms.  As  far  as  they  depend  on  water,  some 
superiority  of  advantages  niay  be  claimed  from  the  un- 
common variety  and  greater  cheapness  of  situations 
adapted  to  mill-seats  with  which  different  parts  of  the 
United  States  abound. 

So  far  as  the  dearness  of  labor  may  be  a  consequence 
of  the  greatness  of  profits  in  any  branch  of  business, 
it  is  no  obstacle  to  its  success.  The  undertaker  can 
afford  to  pay  the  price. 


36  ALEXANDER  HAMILTON. 

There  are  grounds  to  conclude  tliat  undertakers  of 
manufactures  in  tins  country  can  at  this  time  afford  to 
pay  higher  wages  to  the  workmen  they  may  employ 
than  are  paid  to  similar  workmen  in  Europe.  The 
prices  of  foreign  fabrics  in  the  markets  of  the  United 
States,  which  will  for  a  long  time  regulate  the  prices  of 
the  domestic  ones,  may  be  considered  as  compounded  of 
the  following  ingredients  :  The  first  cost  of  materials, 
including  the  taxes,  if  any,  which  are  paid  upon  them 
where  they  are  made,  the  expense  of  grounds,  buildings, 
machinery  and  tools  ;  the  wages  of  the  persons  employed 
in  the  manufactory ;  the  profits  on  the  capital  or  stock 
employed ;  the  commissions  of  agents  to  purchase  them 
where  they  are  made  ;  the  expense  of  transportation  to 
the  United  States,  including  insurance  and  other  inci- 
dental charges ;  the  taxes  or  duties,  if  any,  and  fees  of 
office  which  are  paid  on  their  exportation ;  the  taxes  or 
duties,  and  fees  of  office  which  are  paid  on  their  im- 
portation. 

As  to  the  first  of  these  items,  the  cost  of  materials, 
the  advantage  upon  the  whole  is  at  present  on  the  side 
of  the  United  States  ;  and  the  difference  in  their  favor 
must  increase  in  proportion  as  a  certain  and  extensive 
domestic  demand  shall  induce  the  proprietors  of  land  to 
devote  more  of  their  attention  to  the  production  of 
those  materials.  It  ought  not  to  escape  observation,  in 
a  comparison  on  this  point,  that  some  of  the  principal 
manufacturing  countries  of  Europe  are  much  more  de- 
pendent on  foreign  supply  for  the  materials  of  their 
manufactures  than  would  be  the  United  States,  who  are 
capable  of  supplying  themselves  with  a  greater  abun- 
dance, as  well  as  a  greater  variety,  of  the  requisite  ma- 
terials. 

As  to  the  second  item,  the  expense  of  grounds,  build- 
ings, machinery  and  tools,  an  ecpiality  at  least  may  be 
assumed ;  since  advantages  in  some  particulars  will 
counterbalance  temporary  disadvantages  in  others. 


BE  POET  ON  MANUFACTUBES.  37 

As  to  the  third  item,  or  the  article  of  wages,  the 
comparison  certainly  turns  against  the  United  States, 
though,  as  before  observed,  not  in  so  great  a  degree  as 
is  commonly  supposed. 

The  fourth  item  is  alike  applicable  to  the  foreign  and 
to  the  domestic  manufacture.  It  is  indeed  more  prop- 
erly a  result  than  a  particular  to  be  compared. 
"■  But  with  respect  to  all  the  remaining  items,  they  are 
alone  applicable  to  the  foreign  manufacture,  and  in  the 
strictest  sense  extraordinaries ;  constituting  a  sum  of 
extra  charge  on  the  foreign  fabric,  which  cannot  be  esti- 
mated at  less  than  from  fifteen  to  thirty  per  cent,  on 
the  cost  of  it  at  the  manufactory. 

This  sum  of  extra  charge  may  confidently  be  regarded 
as  more  than  a  counterpoise  for  the  real  difference  in  the 
price  of  labor ;  and  is  a  satisfactory  proof  that  manu- 
factures may  prosper  in  defiance  of  it  in  the  United 
States. 

To  the  general  allegation  connected  with  the  circum- 
stances of  scarcity  of  hands  and  dearness  of  labor,  that 
extensive  manufactures  can  only  grow  out  of  a  redun- 
dant or  full  population,  it  will  be  sufficient  to  answer 
generally  that  the  fact  has  been  otherwise ;  that  the 
situation  alleged  to  be  an  essential  condition  of  success 
has  not  been  that  of  several  nations,  at  periods  when 
they  had  already  attained  to  maturity  in  a  variety  of 
manufactures. 

The  supposed  want  of  capital  for  the  prosecution  of 
manufactures  in  the  United  States  is  the  most  indefi- 
nite of  the  objections  which  are  usually  opposed  to  it. 

It  is  very  difficult  to  pronounce  anything  precise 
concerning  the  real  extent  of  the  moneyed  capital  of  a 
country,  and  still  more  concerning  the  proportion  which 
it  bears  to  the  objects  that  invite  the  em|)loyment  of 
capital.  It  is  not  less  difficult  to  pronounce  how  far 
the  effect  of  any  given  quantity  of  money  as  capital,  oi-. 


38  ALEXANDER  HAMILTON. 

in  other  words,  as  a  medium  for  circulating  the  industry 
and  property  of  a  nation,  may  be  increased  by  the 
very  circumstance  of  the  additional  motion  which  is 
given  to  it  by  new  objects  of  employment.  That  effect, 
like  the  momentum  of  descending  bodies,  may  not  im- 
properly be  represented,  as  in  a  compound  ratio,  to  mass 
and  velocity.  It  seems  pretty  certain  that  a  given  sum 
of  money  in  a  situation  in  which  the  quick  impulses  of 
commercial  activity  were  little  felt,  would  appear  inad- 
equate to  the  circulation  of  as  great  a  quantity  of  in- 
dustry and  property  as  in  one  in  which  their  full  influ- 
ence was  experienced. 

It  is  not  obvious  why  the  same  objection  might  not  as 
well  be  made  to  external  commerce  as  to  manufactures, 
since  it  is  manifest  that  our  immense  tracts  of  land, 
occupied  and  unoccupied,  are  capable  of  giving  employ- 
ment to  more  capital  than  is  actually  bestowed  on  them. 
It  is  certain  that  the  United  States  offer  a  vast  field  for 
the  advantageous  employment  of  capital;  but  it  does 
not  follow  that  there  will  not  be  found,  in  one  way  or 
another,  a  sufficient  fund  for  the  successful  prosecution 
of  any  species  of  industry  which  is  likely  to  prove  truly 
beneficial. 

The  following  considerations  are  of  a  nature  to  re- 
move all  inquietude  on  the  score  of  want  of  capital. 

The  introduction  of  banks,  as  has  been  shown  on  an- 
other occasion,  has  a  powerful  tendency  to  extend  the 
active  capital  of  a  country.  Experience  of  the  utility 
of  these  institutions  is  multiplying  them  in  the  United 
States.  It  is  probable  that  they  will  be  established 
wherever  they  can  exist  with  advantage  ;  and  wherever 
they  can  be  supported,  if  administered  with  prudence, 
they  will  add  new  energies  to  all  pecuniary  operations. 

The  aid  of  foreign  capital  may  safely  and  with  con- 
siderable latitude  be  taken  into  calculation.  Its  instru- 
mentality has  been  long  experienced  in  our   external 


REPORT  ON  MANUFACTURES.  39 

commerce  ;  and  it  has  begun  to  be  felt  in  various  other 
modes.  Not  only  our  funds  but  our  agriculture  and 
other  internal  improvements  have  been  animated  by  it. 
It  has  already,  in  a  few  instances,  extended  even  to  our 
manufactures. 

It  is  a  well  known  fact  that  there  are  parts  of  Eu- 
rope which  have  more  capital  than  profitable  domestic 
objects  of  employment.  Hence,  among  other  proofs, 
the  large  loans  continually  furnished  to  foreign  states. 
And  it  is  equally  certain  that  the  capital  of  other  parts 
may  find  more  profitable  employment  in  the  United 
States  than  at  home.  And  notwithstanding  there  are 
weighty  inducements  to  prefer  the  employment  of  capi- 
tal at  home,  even  at  less  profit,  to  an  investment  of  it 
abroad,  though  with  greater  gain,  yet  these  inducements 
are  overruled  either  by  a  deficiency  of  employment  or 
by  a  very  material  difference  in  profit.  Both  these 
causes  operate  to  produce  a  transfer  of  foreign  capital 
to  the  United  States.  It  is  certain  that  various  objects 
in  this  country  hold  out  advantages  which  are  with 
difficulty  to  be  equaled  elsewhere  ;  and  under  the  in- 
creasingly favorable  impressions  which  are  entertained 
of  our  government,  the  attractions  will  become  more 
and  more  strong.  These  impressions  will  prove  a  rich 
mine  of  prosperity  to  the  country  if  they  are  confirmed 
and  strengthened  by  the  progress  of  our  affairs.  And 
to  secure  this  advantage,  little  more  is  m^cessary  than 
to  foster  industry  and  cultivate  order  and  tranquillity 
at  home  and  abroad. 

It  is  not  impossible  that  there  may  be  persons  dis- 
posed to  look  with  a  jealous  eye  on  the  introduction  of 
foreign  capital  as  if  it  were  an  instrument  to  de])rive 
our  own  citizens  of  the  profits  of  our  own  industry. 
But  perhaps  there  never  could  be  a  more  unreasonable 
jealousy.  Instead  of  being  viewed  as  a  rival,  it  ought 
to  be  considered  as  a  most  valuable  auxiliary ;  condu- 


40  ALEXANDER  HAMILTON. 

cing  to  put  in  motion  a  greater  quantity  of  productive 
labor  and  a  greater  portion  of  useful  enterprise  than 
could  exist  without  it.  It  is  at  least  evident  that  in  a 
cou.utry  situated  like  the  United  States,  Avith  an  infinite 
fund  of  resources  yet  to  be  unfolded,  every  farthing  of 
foreign  capital  which  is  laid  out  in  internal  meliora- 
tions and  in  industrial  establishments  of  a  permanent 
nature  is  a  precious  acquisition. 

And  whatever  be  the  objects  which  originally  attract 
foreign  capital  when  once  introduced,  it  may  be  directed 
towards  any  purpose  of  beneficial  exertion  which  is 
desired.  And  to  detain  it  among  us  there  can  be  no 
expedient  so  effectual  as  to  enlarge  the  sphere  within 
which  it  may  be  usefully  employed  ;  though  introduced 
merely  with  views  to  speculations  in  the  funds,  it  may 
afterwards  be  rendered  subservient  to  the  interests  of 
agriculture,  commerce  and  manufactures. 

But  the  attraction  of  foreign  capital  for  the  direct 
purpose  of  manufactures  ought  not  to  be  deemed  a  chi- 
merical expectation.  There  are  already  examples  of  it, 
as  remarked  in  another  place.  And  tlie  examples,  if 
the  disposition  be  cultivated,  can  hardly  fail  to  multiply. 
There  are  also  instances  of  another  kind  which  serve  to 
strengthen  the  expectation ;  enterprises  for  improving 
the  public  communications,  by  cutting  canals,  opening 
the  obstructions  in  rivers  and  erecting  bridges,  have  re- 
ceived very  material  aid  from  the  same  source. 

When  the  manufacturing  capitalist  of  Euroj)e  shall 
advert  to  the  many  important  advantages  which  have 
been  intimated  in  the  course  of  this  report,  he  cannot 
but  perceive  very  powerful  inducements  to  a  transfer  of 
himself  and  his  capital  to  the  United  States.  Among 
the  reflections  which  a  most  interesting  peculiarity  of 
situation  is  calculated  to  suggest,  it  cannot  escape  his 
observation  as  a  circumstance  of  moment  in  the  calcu- 
lation, that   tlie  })rogressive  population    and  improve- 


REPORT  ON  MANUFACTURES.  41 

ment  of  the  United  States  insure  a  continually  increas- 
ing domestic  demand  for  the  fabrics  which  he  shall 
produce,  not  to  be  affected  by  any  external  casualties  or 
vicissitudes. 

But  while  there  are  circumstances  sufficiently  strong 
to  authorize  a  considerable  degree  of  reliance  on  the  aid 
of  foreign  capital  towards  the  attainment  of  the  object 
in  view,  it  is  satisfactory  to  have  good  grounds  of  assur- 
ance that  there  are  domestic  resoiirces  of  themselves 
adequate  to  it.  It  happens  that  there  is  a  species  of 
capital  actually  existing  Avithin  the  United  States,  which 
relieves  from  all  inquietude  on  the  score  of  want  of 
capital,  —  this  is  the  funded  debt. 

The  effect  of  a  funded  debt,  as  a  species  of  capital, 
has  been  noticed  upon  a  former  occasion ;  but  a  more 
particular  elucidation  of  the  point  seems  to  be  required 
by  the  stress  which  is  here  laid  upon  it.  This  shall 
accordingly  be  attempted. 

Public  funds  answer  the  purpose  of  capital,  from  the 
estimation  in  which  they  are  usually  held  by  moneyed 
men ;  and  consequently  from  the  ease  and  dispatch 
with  which  they  can  be  turned  into  money.  This  capa- 
city of  prompt  convertibility  into  money  causes  a  trans- 
fer of  stock  to  be,  in  a  great  number  of  cases,  equivalent 
to  a  payment  in  coin  ;  and  where  it  does  not  happen  to 
suit  the  party  who  is  to  receive  to  accept  a  transfer  of 
stock,  the  party  who  is  to  pay  is  never  at  a  loss  to  find 
elsewhere  a  purchaser  of  his  stock,  who  will  furnish 
him,  in  lieu  of  it,  with  the  coin  of  which  he  stands  in 
need. 

Hence,  in  a  sound  and  settled  state  of  the  public 
funds,  a  man  possessed  of  a  sum  in  them  can  embrace 
any  scheme  of  business  which  offers,  with  as  much  con- 
fidence as  if  he  were  possessed  of  an  equal  sum  in  coin. 

This  operation  of  public  funds  as  capital  is  too  obvi- 
ous to  be  denied  ;  but  it  is  objected  to  the  idea  of  their 


42  ALEXANDER  HAMILTON. 

operating  as  an  augmentation  of  the  capital  of  tlie  com- 
munity, that  they  serve  to  occasion  the  destruction  of 
some  other  capital  to  an  equal  amount. 

The  capital  which  alone  they  can  be  supposed  to  de- 
stroy must  consist  of  —  the  anuvial  revenue,  which  is 
applied  to  the  payment  of  interest  on  the  debt  and  to 
the  gradual  redemption  of  the  principal ;  the  amount  of 
the  coin  which  is  employed  in  circulating  the  funds,  or, 
in  other  words,  in  effecting  the  different  alienations 
which  they  undergo. 

But  the  following  appears  to  be  the  true  and  accurate 
view  of  this  matter :  — 

1st.  As  to  the  point  of  the  annual  revenue  requisite 
for  payment  of  interest  and  redemption  of  principal. 

As  a  determinate  proportion  will  tend  to  perspicuity 
in  the  reasoning,  let  it  be  supposed  that  the  annual  reve- 
nue to  be  applied,  corresponding  with  the  modification 
of  the  six  per  cent,  stock  of  the  United  States,  is  in  the 
ratio  of  eight  upon  the  hundred  ;  that  is,  in  the  first 
instance,  six  on  account  of  interest,  and  two  on  account 
of  principal. 

Thus  far  it  is  evident  that  the  capital  destroyed  to 
the  capital  created  would  bear  no  greater  proportion 
than  eight  to  one  hundred.  There  would  be  withdrawn 
from  the  total  mass  of  other  capitals  a  sum  of  $8  to  be 
paid  to  the  public  creditor,  while  he  would  be  possessed 
of  a  sum  of  flOO,  ready  to  be  applied  to  any  purpose, 
to  be  embarked  in  any  enterprise  which  might  appear 
to  him  eligible.  Here,  then,  the  augmentation  of  capi- 
tal, or  the  excess  of  that  which  is  produced  beyond  that 
which  is  destroyed,  is  equal  to  $92. 

To  this  conclusion  it  may  be  objected  that  the  sum 
of  $8  is  to  be  withdrawn  annually  until  the  whole  hun- 
dred is  extinguished ;  and  it  may  be  inferred  that,  in 
process  of  time,  a  capital  will  be  destroyed  equal  to  that 
which  is  at  first  created. 


ttEPORT  ON  MANUFACTURES.  43 

But  it  is  nevertheless  true  that,  during  the  whole  of 
che  interval  between  the  creation  of  the  capital  of  $100 
and  its  reduction  to  a  sum  not  greater  than  that  of  the 
annual  revenue  appropriated  to  its  redemption,  there 
will  be  a  greater  active  capital  in  existence  than  if  no 
debt  had  been  contracted.  The  sum  drawn  from  other 
capitals  in  any  one  year  will  not  exceed  $8  ;  but  there 
will  be,  at  every  instant  of  time  during  the  whole  period 
in  question,  a  sum  corresponding  with  so  much  of  the 
principal  as  remains  unredeemed  in  the  hands  of  some 
person  or  other,  employed  or  ready  to  be  employed  in 
some  profitable  undertaking.  There  will,  therefore,  con- 
stantly be  more  capital  in  capacity  to  be  employed  than 
capital  taken  from  employment.  The  excess  for  the  first 
year  has  been  stated  to  be  f  92 ;  it  Avill  diminish  yearly, 
but  there  always  will  be  an  excess  until  the  principal 
of  the  debt  is  brought  to  a  level  with  the  redeeming 
annuity;  that  is,  in  the  case  which  has  been  assumed 
by  way  of  example,  to  $8.  The  reality  of  this  excess 
becomes  palpable  if  it  be  supposed,  as  often  happens, 
that  the  citizen  of  a  foreign  country  imports  into  the 
United  States  f  100  for  the  purchase  of  an  equal  sum 
of  public  debt.  Here  is  an  absolute  augmentation  of 
the  mass  of  circulating  coin  to  the  extent  of  f  100.  At 
the  end  of  a  year,  the  foreigner  is  presumed  to  draw 
back  18  on  account  of  his  principal  and  interest,  but 
he  still  leaves  $92  of  his  original  deposit  in  circulation, 
as  he,  in  like  manner,  leaves  f  84  at  the  end  of  the 
second  year,  drawing  back  then  also  the  annuity  of 
$8.  And  thus  tlie  u\atter  proceeds  ;  the  capital  left  in 
circulation  diminishing  each  year,  and  coming  nearer 
to  the  level  of  the  annuity  drawn  back.  There  are, 
however,  some  differences  in  the  ultimate  operation  of 
the  part  of  the  debt  which  is  purchased  by  foreigners, 
and  that  which  remains  in  the  hands  of  citizens.  But 
the  general  effect  in  each  case,  though  in  different  de- 
grees, is  to  add  to  the  active  capital  of  the  country. 


44  ALEXANDER  HAMILTON. 

Hitherto  the  reasoning  has  proceeded  on  a  concession 
of  the  position  that  there  is  a  destruction  of  some  other 
capital,  to  the  extent  of  tlie  annuity  appropriated  to  the 
payment  of  the  interest  and  the  redemption  of  the  prin- 
cipal of  the  debt ;  hut  in  this  too  much  has  been  con- 
ceded. There  is  at  most  a  temporary  transfer  of  some 
other  capital  to  the  amount  of  the  annuity  from  those 
who  pay  to  the  creditor  who  receives,  which  he  again 
restores  to  the  circulation  to  resume  the  offices  of  a 
capital.  This  he  does  either  immediately,  by  employ- 
ing the  money  in  some  branch  of  industry  ;  or  medi- 
ately, by  lending  it  to  some  other  person  who  does  so 
employ  it,  or  by  spending  it  on  his  own  maintenance. 
In  either  supposition  there  is  no  destruction  of  capital ; 
there  is  nothing  more  than  a  suspension  of  its  motion 
for  a  time ;  that  is,  while  it  is  passing  from  the  hands 
of  those  who  pay  into  the  public  coffers,  and  thence 
through  the  public  creditor  into  some  other  channel  of 
circulation.  When  the  payments  of  interest  are  peri- 
odical and  quick,  and  made  by  the  instrumentality  of 
banks,  the  diversion  or  suspension  of  capital  may  almost 
be  denominated  momentary.  Hence  the  deduction  on 
this  account  is  far  less  than  it  at  first  sight  appears 
to  be. 

There  is  evidently,  as  far  as  regards  the  annuity,  no 
destritction  nor  transfer  of  any. other  capital  than  that 
portion  of  the  income  of  each  individual  which  goes  to 
make  up  the  annuity.  The  land  which  furnishes  the 
farmer  with  the  sum  which  he  is  to  contribute  remains 
the  same,  and  the  like  may  be  observed  of  other  capitals. 
Indeed,  as  far  as  the  tax  which  is  the  object  of  contri- 
bution (as  frequently  happens  when  it  does  not  oppress 
by  its  weight)  may  have  been  a  motive  to  greater  exer- 
tion in  any  occupation,  it  may  even  serve  to  increase 
the  contributory  capital.  This  idea  is  not  without  im- 
portance in  the  general  view  of  the  subject. 


BEFOBT  ON  MANUFACTURES.  45 

It  remains  to  see  what  further  deduction  ought  to  be 
made  from  the  capital  which  is  created  by  the  existence 
of  the  debt,  on  account  of  the  coin  which  is  employed 
in  its  circulation.  This  is  susceptible  of  much  less  pre- 
cise calculation  than  the  article  which  has  been  just 
discussed.  It  is  impossible  to  say  what  proportion  of 
coin  is  necessary  to  carry  on  tlie  alienations  which  any 
species  of  property  usually  undergoes.  The  quantity 
indeed  varies  according  to  circumstances.  But  it  may 
still,  without  hesitation,  be  pronounced,  from  the  quick- 
ness of  the  rotation,  or  rather  of  the  transitions,  that 
the  medium  of  circulation  always  bears  but  a  small  pro- 
portion to  the  amount  of  the  property  circulated.  And 
it  is  thence  satisfactorily  deducible,  that  the  coin  em- 
ployed in  the  negotiations  of  the  funds,  and  which  serves 
to  give  them  activity,  as  capital,  is  incomparably  less 
than  the  sum  of  the  debt  negotiated  for  the  purpose  of 
business. 

It  ought  not,  however,  to  be  omitted  that  the  negotia- 
tion of  the  funds  becomes  itself  a  distinct  business  ;  which 
employs,  and  by  employing  diverts  a  portion  of  the 
circulating  coin  from  other  pursuits.  But  making  due 
allowance  for  this  circumstance,  there  is  no  reason  to 
conclude  that  the  effect  of  the  diversion  of  coin,  in  the 
whole  operation,  bears  any  considerable  proportion  to 
the  amount  of  the  capital  to  which  it  gives  activity. 
The  sum  of  the  debt  in  circulation  is  continually  at  the 
command  of  any  useful  enterprise  :  the  coin  itself  which 
circulates  it  is  never  more  than  momentarily  suspended 
from  its  ordinary  functions.  It  experiences  an  inces- 
sant and  rapid  flux  and  reflux  to  and  from  the  channels 
of  industry  to  those  of  speculations  in  the  funds. 

There  are  strong  circumstances  in  confirmation  of 
this  theory.  The  force  of  moneyed  capital  which  has 
been  displayed  in  Great  F)ritain,  and  the  height  to  wliich 
every  si)ecies  of  industry  has  grown  up  under  it,  defy  a 


46  ALEXANDER  HAMILTON. 

solution  from  the  quantity  of  coin  which  that  kingdom 
has  ever  possessed.  Accordingly,  it  has  been  coeval 
with  its  funding  system,  the  ])revailing  opinion  of  the 
men  of  business,  and  of  the  generality  of  the  most  saga- 
cious theorists  of  that  country,  that  the  operation  of 
the  public  funds  as  capital  has  contributed  to  the  effect 
in  question.  Among  ourselves,  appearances  thus  far 
favor  the  same  conclusion.  Industry  in  general  seems 
to  have  been  reanimated.  There  are  symptoms  indicat- 
ing an  extension  of  our  commerce.  Our  navigation  has 
certainly  of  late  had  a  considerable  spring ;  and  there 
appears  to  l)e,  in  many  parts  of  the  Union,  a  command 
of  cajntal  which,  till  lately,  since  the  Revolution  at  least, 
was  unknown.  But  it  is  at  the  same  time  to  be  ac- 
knowledged that  other  circumstances  have  concurred 
(and  in  a  great  degree)  in  producing  the  present  state 
of  things ;  and  that  the  appearances  are  not  yet  suffi- 
ciently decisive  to  be  entirely  relied  upon. 

In  the  question  under  discussion,  it  is  important  to 
distinguish  between  an  absolute  increase  of  capital,  or 
an  accession  of  real  Avealth,  and  an  artificial  increase  of 
capital,  as  an  engine  of  business,  or  as  an  instrument 
of  industry  and  commerce.  In  the  first  sense,  a  funded 
debt  has  no  pretensions  to  being  deemed  an  increase  of 
capital;  in  the  last,  it  has  pretensions  which  are  not 
easy  to  be  controverted.  Of  a  similar  nature  is  bank 
credit,  and,  in  an  inferior  degree,  every  species  of  pri- 
vate credit. 

But  though  a  funded  debt  is  not,  in  the  first  instance, 
an  absolute  increase  of  capital,  or  an  augmentation  of 
real  wealth,  yet,  l)y  serving  as  a  new  power  in  the  op- 
erations of  industry,  it  has,  Avithiu  certain  bounds,  a 
tendency  to  increase  the  real  wealth  of  a  community ; 
in  like  manner,  as  money  borrowed  by  a  thrifty  farmer 
to  be  laid  out  in  the  improvement  of  his  farm  may,  in 
the  end,  add  to  his  stock  of  real  riches. 


REPORT  ON  MANUFACTURES.  47 

There  are  respectable  individuals,  who,  from  a  just 
aversion  to  an  accumulation  of  public  debt,  are  unwill- 
ing to  concede  to  it  any  kind  of  utility ;  who  can  dis- 
cern no  good  to  alleviate  the  ill  with  which  they  suppose 
it  pregnant ;  who  cannot  be  persuaded  that  it  ought,  in 
any  sense,  to  be  viewed  as  an  increase  of  capital,  lest  it 
should  be  inferred  that  the  more  debt  the  more  capital, 
the  greater  the  burdens,  the  greater  the  blessings  of  the 
community. 

But  it  interests  the  public  councils  to  estimate  every 
object  as  it  truly  is  ;  to  appreciate  how  far  the  good  in 
any  measure  is  compensated  by  the  ill,  or  the  ill  by  the 
good :  either  of  them  is  seldom  unmixed. 

Neither  will  it  follow  that  an  accumulation  of  debt 
is  desirable,  because  a  certain  degree  of  it  operates  as 
capital.  There  may  be  a  plethora  in  the  political  as 
in  the  natural  body ;  there  may  be  a  state  of  things  in 
which  any  such  artificial  capital  is  unnecessary.  The 
debt,  too,  may  be  swelled  to  such  a  size  as  that  the 
greatest  part  of  it  may  cease  to  be  useful  as  a  capital, 
serving  only  to  pamper  the  dissipation  of  idle  and  dis- 
solute individuals  ;  as  that  the  sums  required  to  pay 
the  interest  upon  it  may  become  oppressive,  and  beyond 
tlie  means  whicli  a  government  can  employ,  consistently 
with  its  tranquillity,  to  raise  them  ;  as  that  the  resources 
of  taxation,  to  face  the  debt,  may  have  been  strained 
too  far  to  admit  of  extensions  adequate  to  exigencies 
which  regard  the  public  safety.  Where  this  critical 
j)oint  is  cannot  be  pronounced ;  but  it  is  impossible  to 
believe  that  there  is  not  such  a  point. 

And,  as  the  vicissitudes  of  nations  beget  a  perpetual 
tendency  to  the  accumulation  of  debt,  there  ought  to 
be  in  every  government  a  perpetual,  anxious,  and  un- 
ceasing effort  to  reduce  that  which  at  any  time  exists, 
as  fast  as  shall  be  practicable,  consistently  with  integ- 
rity and  good  faith. 


48  ALEXANDER  HAMILTON. 

Eeasoiiings  on  a  subject  comprehending  ideas  so  ab- 
stract and  complex,  so  little  reducible  to  precise  calcu- 
lation as  those  which  enter  into  the  question  just  dis- 
cussed, are  always  attended  with  a  danger  of  running 
into  fallacies.  Due  allowance  ought,  therefore,  to  be 
made  for  this  possibility.  But  as  far  as  the  nature  of 
the  subject  admits  of  it,  there  appears  to  be  satisfac- 
tory ground  for  a  belief  that  the  public  funds  operate 
as  a  resource  of  capital  to  the  citizens  of  the  United 
States ;  and,  if  they  are  a  resource  at  all,  it  is  an  exten- 
sive one. 

To  all  the  arguments  which  are  brought  to  evince  the 
impracticability  of  success  in  manufacturing  establish- 
ments in  the  United  States,  it  might  have  been  a  suffi- 
cient answer  to  have  referred  to  the  experience  of  what 
has  been  already  done  ;  it  is  certain  that  several  im- 
portant branches  have  grown  up  and  flourished  with  a 
rapidity  which  surprises,  affording  an  encouraging  as- 
surance of  success  in  future  attempts.  Of  these  it 
may  not  be  improper  to  enumerate  the  most  consider- 
able :  — 

1.  Of  SJcms.  —  Tanned  and  tawed  leather,  dressed 
skins,  shoes,  boots,  and  slippers,  harness  and  saddlery 
of  all  kinds,  portmanteaus  and  trunks,  leather  breeches, 
gloves,  muffs  and  tippets,  parchment  and  glue. 

2.  Of  Iron.  —  Bar  and  sheet  iron,  steel,  nail  rods 
and  nails,  implements  of  husbandry,  stoves,  pots,  and 
other  household  utensils,  the  steel  and  iron  work  of 
carriages,  and  for  shipbuilding,  ancliors,  scale-beams, 
and  weights,  and  various  tools  of  artificers,  arms  of  dif- 
ferent kinds,  though  the  manufacture  of  these  last  has 
of  late  diminished  for  want  of  demand. 

3.  Of  Wood.  —  Ships,  cabinet  wares  and  turnery, 
wool  and  cotton  cards,  and  other  machinery  for  manu- 
factures and  husbandry,  mathematical  instruments, 
coopers'  wares  of  every  kind. 


REPORT  ON  MANUFACTURES.  49 

4.  Of  Flax  and  Hemjj.  —  Cables,  sail-cloth,  cordage, 
twine  and  i^ackthread. 

5.  Bricks,  and  coarse  tiles  and  potters'  wares. 

6.  Ardent  spirits  and  malt  liquors. 

7.  Writing  and  printing  paper,  sheathing  and  wrap- 
ping paper,  pasteboards,  fullers'  or  press  papers,  paper 
liangings. 

8.  Hats  of  fur  and  wool,  and  of  mixtures  of  both, 
women's  stuff  and  silk  shoes. 

9.  Eefined  sugars. 

10.  Oils  of  animals  and  seeds,  soap,  spermaceti  and 
tallow  candles. 

11.  Copper  and  brass  wares  (particularly  utensils  for 
distillers,  sugar  refiners  and  brewers),  andirons  and 
other  articles  for  household  use,  philosophical  appa- 
ratus. 

12.  Tin  wares  for  most  purposes  of  ordinary  use. 

13.  Carriages  of  all  kinds. 

14.  Snuff,  chewing  and  smoking  tobacco. 

15.  Starch  and  hair  powder. 

16.  Lampblack  and  other  painters'  colors. 

17.  Gunpowder. 

Besides  manufactories  of  these  articles,  which  are 
carried  on  as  regular  trades,  and  have  attained  to  a 
considerable  degree  of  maturity,  there  is  a  vast  scene 
of  household  manufacturing  which  contributes  more 
largely  to  the  supply  of  the  community  than  could  be 
imagined  without  having  made  it  an  object  of  particu- 
lar inquiry.  This  observation  is  the  pleasing  result  of 
the  investigation  to  which  the  subject  of  this  report  has 
led,  and  is  applicable  as  well  to  the  southern  as  to  the 
middle  and  northern  States.  Great  quantities  of  coarse 
cloths,  coatings,  serges  and  flannels,  linsey-woolseys, 
hosiery  of  wool,  cotton  and  thread,  coarse  fustians, 
jeans  and  muslins,  checked  and  striped  cotton  and  linen 
goods,  bedticks,  coverlets  and  counterpanes,  tow  linens, 


50  ALEXANDER  HAMILTON. 

coarse  shirtings,  sheetings,  toweling  and  table  linen, 
and  various  mixtures  of  wool  and  cotton,  and  of  cotton 
and  flax,  are  made  in  the  household  way,  and  in  many 
instances  to  an  extent  not  only  sufficient  for  the  supply 
of  the  families  in  which  they  are  made,  but  for  sale, 
and  even  in  some  cases  for  exportation.  It  is  computed 
in  a  number  of  districts  that  two-thirds,  three-fourths, 
and  even  four-fifths  of  all  the  clothing  of  the  inhabi- 
tants are  made  by  themselves.  The  importance  of  so . 
great  a  progress  as  appears  to  have  been  made  in  fam- 
ily manufactures  within  a  few  years,  both  in  a  moral 
and  political  view,  renders  the  fact  highly  interesting. 

Xeither  does  the  above  enumeration  comprehend  all 
the  articles  that  are  manufactured  as  regular  trades. 
Many  others  occur  which  are  equally  well  established, 
but  which  not  being  of  equal  importance  have  been 
omitted.  And  there  are  many  attempts  still  in  their 
infancy,  which,  though  attended  with  very  favorable 
appearances,  could  not  have  been  properly  comprised  in 
an  enumeration  of  manufactories  already  established. 
There  are  other  articles  also  of  great  importance  which, 
thoiigh  strictly  speaking  manufactures,  are  omitted  as 
being  immediately  connected  with  husbandry  ;  such  are 
flour,  pot  and  pearl  ash,  pitch,  tar,  turpentine,  and  the 
like. 

There  remains  to  be  noticed  an  objection  to  the  en- 
couragement of  manufactures  of  a  nature  different  from 
those  which  question  the  probability  of  success.  This 
is  derived  from  its  supposed  tendency  to  give  a  mono- 
poly of  advantages  to  particular  classes  at  the  expense 
of  the  rest  of  the  community,  who,  it  is  affirmed,  would 
be  able  to  ])rocure  the  requisite  supplies  of  manufac- 
tured articles  on  better  terms  from  foreigners  than  from 
our  own  citizens ;  and  who,  it  is  alleged,  are  reduced  to 
a  necessity  of  paying  an  enhanced  price  for  whatever 
they  want,  by  every  measure  which  obstructs  the  free 
competition  of  foreign  commodities. 


BEPORT  ON  MANUFACTURES.  51 

It  is  not  an  unreasonable  supposition  that  nieasvires 
Avhicli  serve  to  abridge  the  free  competition  of  for- 
eign articles  have  a  tendency  to  occasion  an  enhance- 
ment of  prices,  and  it  is  not  to  be  denied  that  such  is 
the  effect  in  a  number  of  cases ;  but  the  fact  does  not 
uniformly  correspond  with  the  theory.  A  reduction  of 
prices  has  in  several  instances  immediately  succeeded 
the  establishment  of  a  domestic  manufacture.  Whether 
it  be  that  foreign  manufacturers  endeavor  to  supplant 
by  underselling  our  own,  or  whatever  else  be  the  cause, 
the  effect  has  been  such  as  is  stated,  and  the  reverse  of 
what  might  have  been  expected. 

But  though  it  were  true  that  the  immediate  and  cer- 
tain effect  of  regulations  controlling  the  competition  of 
foreign  with  domestic  fabrics  was  an  increase  of  price, 
it  is  universally  true  that  the  contrary  is  the  viltimate 
effect  with  every  successful  manufacture.  When  a  do- 
mestic manufacture  has  attained  to  perfection,  and  has 
engaged  in  the  prosecution  of  it  a  competent  number 
of  persons,  it  invariably  becomes  cheaper.  Being  free 
from  the  heavy  charges  which  attend  the  importation 
of  foreign  commodities,  it  can  be  afforded,  and  accord- 
ingly seldom  or  never  fails  to  be  sold  cheaper  in  process 
of  time  than  was  the  foreign  article  for  which  it  is 
a  substitute.  The  internal  competition  which  takes 
place  soon  does  away  everything  like  monopoly,  and 
by  degrees  reduces  the  price  of  the  article  to  the  mini- 
itium  of  a  reasonable  profit  on  the  capital  employed. 
This  accords  with  the  reason  of  the  thing  and  with  ex- 
perience. 

Whence  it  follows  that  it  is  the  interest  of  a  commu- 
nity, with  a  view  to  eventual  and  permanent  economy, 
to  encourage  the  growth  of  manufactures.  In  a  na- 
tional view,  a  tem})orary  enhancement  of  price  must 
always  be  well  compensated  by  a  permanent  reduction 
of  it. 


52  ALEXANDER  UAMILTON. 

It  is  a  reflection  which  may  with  propriety  be  indulged 
here,  that  this  eventual  diminution  of  the  prices  of 
nmnufactnred  articles,  which  is  the  result  of  internal 
manufacturing  establishments,  has  a  direct  and  very  im- 
portant tendency  to  benefit  agriculture.  It  enables  the 
farmer  to  procure,  with  a  smaller  quantity  of  his  labor, 
the  manufactured  produce  of  which  he  stands  in  need, 
and  consequently  increases  the  value  of  his  income  and 
property. 

The  objections  which  are  commonly  made  to  the  ex- 
pediency of  encouraging,  and  to  the  probability  of  suc- 
ceeding in  manufacturing  pursuits  in  the  United  States 
liaving  now  been  discussed,  the  considerations  which 
have  appeared  in  the  course  of  the  discussion,  recom- 
mending that  species  of  industry  to  the  patronage  of  the 
government,  will  be  materially  strengthened  by  a  few 
general  and  some  particular  topics  which  have  been 
naturally  reserved  for  subsequent  notice. 

I.  There  seems  to  be  a  moral  certainty  that  the  trade 
of  a  country  which  is  both  manufacturing  and  agricul- 
tural will  be  more  lucrative  and  prosperous  than  that 
of  a  country  which  is  merely  agricultural. 

One  reason  for  this  is  found  in  that  general  effort  of 
nations  (which  has  been  already  mentioned)  to  procure 
from  their  own  soils  the  articles  of  prime  necessity 
requisite  to  their  own  consumption  and  use,  and  which 
serves  to  render  their  demand  for  a  foreign  supply  of 
such  articles  in  a  great  degree  occasional  and  contin- 
gent. Hence,  while  the  necessities  of  nations  exclu- 
sively devoted  to  agriculture  for  the  fabrics  of  manufac- 
turing states  are  constant  and  regular,  the  wants  of  the 
latter  for  the  products  of  the  former  are  liable  to  very 
considerable  fluctuations  and  interruptions.  The  great 
inequalities  resulting  from  difference  of  seasons  have 
been  elsewhere  remarked.  This  uniformity  of  demand 
on  one  side,  and  unsteadiness  of  it  on  the  other,  must 


REPORT  ON  MANUFACTURES.  53 

necessarily  have  a  tendency  to  cause  the  general  course 
of  the  exchange  of  commodities  between  the  parties  to 
turn  to  the  disadvantage  of  the  merely  agricultural 
states.  Peculiarity  of  situation,  a  climate  and  soil 
adapted  to  the  production  of  peculiar  commodities,  may 
sometimes  contradict  the  rule,  but  there  is  every  reason 
to  believe  that  it  will  be  found  in  the  main  a  just  one. 

Another  circumstance  which  gives  a  superiority  of 
commercial  advantages  to  states  that  manufacture  as 
well  as  cultivate  consists  in  the  more  numerous  attrac- 
tions which  a  more  diversified  market  offers  to  foreign 
customers,  and  in  the  greater  scope  which  it  affords  to 
mercantile  enterprise.  It  is  a  position  of  indisputable 
truth  in  commerce,  depending  too  on  very  obvious  rea- 
sons, that  the  greatest  resort  will  ever  be  to  those  marts 
where  commodities,  while  equally  abundant,  are  most 
various.  Each  difference  of  kind  holds  out  an  addi- 
tional inducement.  And  it  is  a  position  not  less  clear, 
that  the  field  of  enterprise  must  be  enlarged  to  the 
merchants  of  a  country  in  proportion  to  the  variety  as 
well  as  the  abundance  of  commodities  which  they  find 
at  home  for  exportation  to  foreign  markets. 

A  third  circumstance,  perhaps  not  inferior  to  either 
of  the  other  two,  conferring  the  superiority  which  has 
been  stated,  has  relation  to  the  stagnations  of  demand 
for  certain  commodities  which  at  some  time  or  other  in- 
terfere more  or  less  with  the  sale  of  all.  The  nation 
which  can  bring  to  market  but  few  articles  is  likely  to 
be  more  quickly  and  sensibly  affected  by  such  stagna- 
tions than  one  which  is  always  possessed  of  a  great 
variety  of  commodities  :  the  former  frequently  finds  too 
great  a  portion  of  its  stock  of  materials  for  sale  or  ex- 
change lying  on  hand,  or  is  obliged  to  make  injurious 
sacrifices  to  supply  its  wants  of  foreign  articles,  which 
are  numerous  and  urgent  in  proportion  to  the  smallness 
of  the  number  of  its  own.     The  latter  commonly  finds 


64  ALEXANDER  HAMILTON. 

itself  indemnified  by  the  liigli  prices  of  some  articles 
for  the  low  prices  of  others ;  and  the  prompt  and  ad- 
vantageous sale  of  those  articles  which  are  in  demand 
enables  its  merchants  the  better  to  wait  for  a  favorable 
change  in  respect  to  those  which  are  not.  There  is 
ground  to  believe,  that  a  difference  of  situation  in  this 
particular  has  immensely  different  effects  upon  the 
wealth  and  prosperity  of  nations. 

From  these  circumstances  collectively  two  important 
inferences  are  to  be  drawn:  one,  that  there  is  always 
a  higher  probability  of  a  favorable  balance  of  trade 
in  resrard  to  countries  in  which  manufactures  founded 
on  the  basis  of  a  thriving  agriculture  flourish,  than  in 
regard  to  those  which  are  confined  wholly,  or  almost 
wliolly,  to  agriculture ;  the  other  (which  is  also  a  con- 
sequence of  the  first),  that  countries  of  the  former  de- 
scription are  likely  to  possess  more  pecuniary  wealth 
or  money  than  those  of  the  latter. 

Facts  appear  to  correspond  with  this  conclusion.  The 
importations  of  manufactured  su})plies  seem  invariably 
to  drain  the  merely  agricultural  people  of  their  wealth. 
Let  the  situation  of  the  manufacturing  countries  of 
Europe  be  compared  in  this  particular  with  that  of 
countries  which  only  cultivate,  and  the  disparity  will 
be  striking.  Other  causes,  it  is  true,  help  to  account  for 
tliis  disparity  between  some  of  them ;  and  among  these 
causes,  the  relative  state  of  agriculture ;  but  between 
others  of  them,  the  most  prominent  circumstance  of 
dissimilitude  arises  from  the  comparative  state  of  man- 
ufactures. In  corroboration  of  the  same  idea,  it  ought 
not  to  escape  remark  that  the  West  India  islands,  the 
soils  of  which  are  the  most  fertile,  and  the  nation 
which  in  the  greatest  degree  supplies  the  rest  of  the 
world  with  the  precious  metals,  exchange  to  a  loss  with 
almost  every  other  country. 

As  far  as  experience  at  home  may  guide,  it  will  lead 


REPORT  ON  MANUFACTURES.  55 

to  the  same  conclusion.  Previous  to  the  Revohition,  the 
quantity  of  coin  possessed  by  the  colonies  which  now 
compose  the  United  States  appeared  to  be  inadequate 
to  their  circulation  ;  and  their  debt  to  Great  Britain 
was  progressive.  Since  the  Revolution,  the  States  in 
which  manufactures  have  most  increased  have  recov- 
ered fastest  from  the  injuries  of  the  late  war,  and 
abound  most  in  pecuniary  resources. 

It  ought  to  be  admitted,  however,  in  this,  as  in  the 
preceding  case,  that  causes  irrelative  to  the  state  of 
manufactures  account  in  a  degree  for  the  phenomena 
remarked.  The  continual  progress  of  new  settlements 
has  a  natural  tendency  to  occasion  an  unfavorable  bal- 
ance of  trade,  though  it  indemnities  for  the  inconveni- 
ence by  that  increase  of  the  national  capital  which 
flows  from  the  conversion  of  waste  into  improved  lands  ; 
and  the  different  degrees  of  external  commerce  which 
are  carried  on  by  the  different  states  may  make  mate- 
rial differences  in  the  comparative  state  of  their  wealth. 
The  first  circumstance  has  reference  to  the  deficiency 
of  coin,  and  the  increase  of  debt  previous  to  the  Revo- 
lution ;  the  last  to  the  advantages  which  the  most  man- 
ufacturing states  appear  to  have  enjoyed  over  the  others 
since  the  termination  of  the  late  war. 

But  the  uniform  appearance  of  an  abundance  of  specie 
as  the  concomitant  of  a  flourisliing  state  of  manufac- 
tures, and  of  the  reverse  where  they  do  not  prevail, 
afford  a  strong  presumption  of  their  favorable  opera- 
tion upon  the  wealth  of  a  country. 

Not  only  the  wealth,  but  the  independence  and  secu- 
rity of  a  country  appear  to  be  materially  connected  with 
the  prosperity  of  manufactures.  Every  nation,  with  a 
view  to  those  great  objects,  ought  to  endeavor  to  pos- 
sess within  itself  all  the  essentials  of  national  supply. 
These  comprise  tlie  means  of  subsistence,  habitation, 
clothing,  and  defense. 


56  ALEXANBER  HAMILTON. 

The  possession  of  these  is  necessary  to  the  perfection 
of  the  body  politic ;  to  tlie  safety,  as  well  as  to  the  wel- 
fare, of  the  society  ;  the  want  of  either  is  the  want  of 
an  important  organ  of  political  life  and  motion ;  and 
in  the  varions  crises  which  await  a  state,  it  must  severely 
feel  the  effects  of  any  such  deficiency.  The  extreme 
embarrassments  of  the  United  States  during  the  late 
war,  from  an  incapacity  of  supplying  themselves,  are 
still  matter  of  keen  recollection.  A  future  war  might 
be  expected  again  to  exemplify  the  mischiefs  and  dan- 
gers of  a  situation  -to  which  that  incapacity  is  still  in 
too  great  a  degree  applicable,  unless  changed  by  timely 
and  vigorous  exertions.  To  effect  this  change  as  fast 
as  shall  be  prudent  merits  all  the  attention  and  all  the 
zeal  of  our  public  councils  ;  it  is  the  next  great  work  to 
be  accomplished. 

The  want  of  a  navy  to  protect  our  external  commerce, 
as  long  as  it  shall  continue,  must  render  it  a  peculiarly 
precarious  reliance  for  the  supply  of  essential  articles, 
and  must  serve  to  strengthen  prodigiously  the  arguments 
in  favor  of  manufactures. 

To  these  general  considerations  are  added  some  of  a 
more  particular  nature. 

Our  distance  from  Europe,  the  great  fountain  of  manu- 
factured supply,  subjects  us,  in  the  existing  state  of 
things,  to  inconvenience  and  loss  in  two  ways. 

The  bulkiness  of  those  commodities  which  are  the 
chief  productions  of  the  soil  necessarily  imposes  very 
heavy  charges  on  their  transportation  to  distant  mar- 
kets. These  charges,  in  the  cases  in  which  the  nations 
to  whom  our  products  are  sent  maintain  a  competition 
in  the  supply  of  their  own  markets,  principally  fall 
upon  us,  and  form  material  deductions  from  the  primi- 
tive value  of  the  articles  furnished.  The  charges  on 
manufactured  supplies  brought  from  Europe  are  greatly 
enhanced  by  the  same  circumstance  of  distance.     These 


BEPORT  ON  MANUFACTURES.  57 

charges,  again,  in  the  cases  in  which  onr  own  industry- 
maintains  no  competition  in  our  own  markets,  also  prin- 
cipally fall  upon  us  ;  and  are  an  additional  cause  of  ex- 
traordinary deduction  from  the  primitive  valiie  of  our 
own  products,  these  being  the  materials  of  exchange  for 
the  foreign  fabrics  which  we  consume. 

The  equality  and  moderation  of  individual  property, 
and  the  growing  settlements  of  new  districts,  occasion 
in  this  country  an  unusual  demand  for  coarse  manufac- 
tures ;  the  charges  of  which,  being  greater  in  proportion 
to  their  greater  bulk,  augment  the  disadvantage  which 
has  been  just  described. 

As,  in  most  countries,  domestic  supplies  maintain  a 
very  considerable  competition  with  such  foreign  pro- 
ductions of  the  soil  as  are  imported  for  sale,  if  the  ex- 
tensive establishment  of  manufactories  in  the  United 
States  does  not  create  a  similar  competition  in  respect 
to  manufactured  articles,  it  appears  to  be  clearly  deduci- 
ble,  from  the  considerations  which  have  been  mentioned, 
that  they  must  sustain  a  double  loss  in  their  exchanges 
with  foreign  nations,  strongly  conducive  to  an  unfa- 
vorable balance  of  trade,  and  very  prejudicial  to  their 
interests. 

These  disadvantages  press  with  no  small  weight  on 
the  landed  interest  of  the  country.  In  seasons  of  peace 
they  cause  a  serious  deduction  from  the  intrinsic  value 
of  the  products  of  the  soil.  In  the  time  of  a  war,  which 
should  either  involve  ourselves  or  another  nation  pos- 
sessing a  considerable  share  of  our  carrying  trade,  the 
charges  on  the  transportation  of  our  commodities,  bulky 
as  most  of  them  are,  could  hardly  fail  to  prove  a  griev- 
ous burden  to  the  farmer,  while  obliged  to  depend  in  so 
great  a  degree  as  he  now  does  upon  foreign  markets  for 
the  vent  of  the  surplus  of  his  labor. 

As  far  as  the  prosperity  of  the  fisheries  of  the  United 
States  is  impeded  by  the  want  of  an  adequate  market. 


58  ALEXANDER  HAMILTON. 

there  arises  another  special  reason  for  desiring  the  ex- 
tension of  mannfactures.  Besides  the  fish,  which  in 
many  places  wonld  be  litely  to  make  a  part  of  the  sub- 
sistence of  the  persons  employed,  it  is  known  that  the 
oils,  bones,  and  skins  of  marine  animals  are  of  extensive 
\ise  in  various  manufactures.  Hence  the  prospect  of  an 
additional  demand  for  the  produce  of  the  fisheries. 

One  more  point  of  view  only  remains,  in  which  to 
consider  the  expediency  of  encouraging  manufactures 
in  the  United  States. 

It  is  not  uncommon  to  meet  with  an  opinion,  that 
though  the  promoting  of  manufactures  may  be  the  in- 
terest of  a  part  of  the  Union,  it  is  contrary  to  that  of 
another  part.  The  northern  and  southern  regions  are 
sometimes  represented  as  having  adverse  interests  in 
this  respect.  Those  are  called  niamifacturing ;  these, 
agricultural  States ;  and  a  species  of  opposition  is  ima- 
gined to  subsist  between  the  manufacturing  and  agri- 
cultural interests. 

This  idea  of  an  opposition  between  those  two  inter- 
ests is  the  common  error  of  the  early  periods  of  every 
country  ;  but  experience  gradually  dissipates  it.  In- 
deed, they  are  perceived  so  often  to  succor  and  to 
befriend  each  other,  that  they  come  at  length  to  be 
considered  as  one  ;  a  supposition  which  has  been  fre- 
quently nbused,  and  is  not  universally  true.  Particular 
encouragements  of  particular  manufactures  may  be  of  a 
nature  to  sacrifice  the  interests  of  landholders  to  those 
of  manufacturers  ;  but  it  is  nevertheless  a  maxim,  well 
established  by  experience  and  generally  acknowledged 
where  there  has  been  sufficient  experience,  that  the 
aggregate  prosperity  of  manufactures,  and  the  aggre- 
gate prosperity  of  agricxdture,  are  intimately  connected. 
In  the  course  of  the  discussion  which  has  had  place, 
various  weighty  considerations  have  been  adduced,  oper- 
ating in  siipport  of  that  maxim.     Perhaps  the  superior 


REPORT  ON  MANUFACTURES.  59 

steadiness  of  the  demand  of  a  domestic  market  for  the 
surplus  produce  of  tlie  soil  is  alone  a  convincing  argu- 
ment of  its  truth. 

Ideas  of  a  contrariety  of  interests  between  the  north- 
ern and  southern  regions  of  the  Union  are  in  the  main 
as  unfounded  as  they  are  mischievous.  The  diversity 
of  circumstances  on  which  such  contrariety  is  usually 
predicated,  authorizes  a  directly  contrary  conclusion. 
Mutual  wants  constitute  one  of  the  strongest  links  of 
political  connection  ;  and  the  extent  of  these  bears  a 
natural  proportion  to  the  diversity  in  the  means  of  mu- 
tual supply. 

Suggestions  of  an  opposite  complexion  are  ever  to  be 
deplored  as  unfriendly  to  the  steady  pursuit  of  one 
great  common  cause  and  to  the  perfect  harmony  of  all 
the  parts. 

In  proportion  as  the  mind  is  accustomed  to  trace  the 
intimate  connection  of  interest  which  subsists  betAveen 
all  the  parts  of  a  society  united  under  the  same  govern- 
ment, the  infinite  variety  of  channels  which  serve  to 
circulate  the  prosperity  of  each  to  and  through  the  rest, 
in  that  proportion  will  it  be  little  apt  to  be  disturbed 
by  solicitudes  and  apprehensions  which  originate  in 
local  discriminations.  It  is  a  truth  as  important  as  it 
is  agreeable,  and  one  to  which  it  is  not  easy  to  imagine 
exceptions,  that  everything  tending  to  establish  substan- 
tial and  permanent  order  in  the  affairs  of  a  country,  to 
increase  the  total  mass  of  industry  and  opulence,  is 
ultimately  beneficial  to  every  part  of  it.  On  the  credit 
of  this  great  truth,  an  acquiescence  may  safely  be  ac- 
corded from  every  quarter  to  all  institutions  and  ar- 
rangements which  promise  a  confirmation  of  public 
order  and  an  augmentation  of  national  resource. 

But  there  are  more  particular  considerations  which 
serve  to  fortify  the  idea,  that  the  encouragement  of  manu- 
factures is  the  interest  of  all  parts  of  the  Union.    If  the 


GO  ALEXANDER  HAMILTON. 

northern  and  middle  States  should  be  the  principal  scenes 
of  such  establishments,  they  would  immediately  benefit 
the  more  southern,  by  creating  a  demand  for  productions, 
some  of  which  they  have  in  common  with  the  other 
States,  and  others  of  which  are  either  peculiar  to  them, 
or  more  abundant,  or  of  better  quality  than  elsewhere. 
These  productions  principally  are  timber,  flax,  hemp, 
cotton,  wool,  raw  silk,  indigo,  iron,  lead,  furs,  hides,  skins, 
and  coals.  Of  these  articles,  cotton  and  indigo  are  pe- 
culiar to  the  southern  States,  as  are  hitherto  lead  and 
coal.  Flax  and  hemp  are  or  may  be  raised  in  greater 
abundance  there  than  in  the  more  northern  States  ;  and 
the  wool  of  Virginia  is  said  to  be  of  better  quality  than 
that  of  any  other  State,  —  a  circumstance  rendered  the 
more  j)robable  by  the  reflection  that  Virginia  embraces 
the  same  latitudes  with  the  finest  wool  countries  of 
Europe.  The  climate  of  the  South  is  also  better  adapted 
to  the  production  of  silk. 

The  extensive  cultivation  of  cotton  can  perhaps  hardly 
be  expected,  but  from  the  jirevious  establishment  of 
domestic  manufactories  of  the  article ;  and  the  surest 
encouragement  and  vent  for  the  others  would  result 
from  similar  establishments  in  respect  to  them. 

If,  then,  it  satisfactorily  appears  that  it  is  the  inter- 
est of  the  United  States  generally  to  encourage  manu- 
factures, it  merits  particular  attention,  that  there  are 
circumstances  which  render  the  present  a  critical  mo- 
ment for  entering  with  zeal  upon  the  important  busi- 
ness. The  effort  cannot  fail  to  be  materially  seconded 
by  a  considerable  and  increasing  influx  of  money,  in 
consequence  of  foreign  speculations  in  tlie  funds,  and 
by  the  disorders  which  exist  in  different  parts  of  Eu- 
rope. 

The  first  circumstance  not  only  facilitates  the  execu- 
tion of  manufacturing  enterprises,  but  it  indicates  them 
as  a  necessary  mean  to  turn  the  thing  itself  to  advan- 


BEPORT  ON  MANUFACTURES.  61 

tage,  and  to  prevent  its  being  eventually  an  evil.  If 
useful  employment  be  not  found  for  the  money  of  for- 
eigners brought  to  the  country  to  be  invested  in  pur- 
chases of  the  public  debt,  it  will  quickly  be  reexported 
to  defray  the  expense  of  an  extraordinary  consumption 
of  foreign  luxuries ;  and  distressing  drains  of  our  spe- 
cie may  hereafter  be  experienced  to  pay  the  interest 
and  redeem  the  principal  of  the  purchased  debt. 

This  useful  employment,  too,  ought  to  be  of  a  nature 
to  produce  solid  and  permanent  improvements.  If  the 
money  merely  serves  to  give  a  temporary  spring  to  for- 
eign commerce,  as  it  cannot  procure  new  and  lasting 
outlets  for  the  products  of  the  country,  there  will  be  no 
real  or  durable  advantage  gained.  As  far  as  it  shall 
find  its  way  in  agricultural  meliorations,  in  opening 
canals,  and  in  similar  improvements,  it  will  be  produc- 
tive of  substantial  utility.  But  there  is  reason  to  doubt 
whether  in  such  channels  it  is  likely  to  find  sufficient 
employment;  and  still  more  whether  many  of  those 
who  possess  it  would  be  as  readily  attracted  to  objects 
of  this  nature  as  to  manufacturing  pursuits  which  bear 
greater  analogy  to  those  to  which  they  are  accustomed 
and  to  the  spirit  generated  by  them. 

To  open  the  one  field  as  well  as  the  other  will  at  least 
secure  a  better  prospect  of  useful  employment  for  what- 
ever accession  of  money  there  has  been  or  may  be. 

There  is  at  the  present  juncture  a  certain  fermenta- 
tion of  mind,  a  certain  activity  of  speculation  and  enter- 
prise, which,  if  properly  directed,  may  be  made  subser- 
vient to  useful  purposes ;  but  which,  if  left  entirely  to 
itself,  may  be  attended  with  pernicious  effects. 

The  disturbed  state  of  Europe  inclining  its  citizens 
to  emigration,  the  requisite  workmen  will  be  more  easily 
acquired  than  at  another  time ;  and  the  effect  of  multi- 
plying the  opportunities  of  employment  to  those  who 
emigrate  may  be  an  increase  of  the  number  and  extent 


62  ALEXANDER  HAMILTON. 

of  valuable  acquisitions  to  the  population,  arts,  and 
industry  of  the  country. 

To  find  pleasure  in  the  calamities  of  other  nations 
would  be  criminal ;  but  to  benefit  ourselves  by  opening 
an  asylum  to  those  who  suffer  in  consequence  of  them 
is  as  justifiable  as  it  is  politic. 

A  full  view  having  now  been  taken  of  the  induce- 
ments to  the  promotion  of  manufactures  in  the  United 
States,  accompanied  with  an  examination  of  the  princi- 
pal objections  which  are  commonly  urged  m  oj^position, 
it  is  proper,  in  the  next  place,  to  consider  the  means  by 
which  it  may  be  effected,  as  introductory  to  a  specifica- 
tion of  the  objects  which  in  the  present  state  of  things 
appear  the  most  fit  to  be  encouraged,  and  of  the  par- 
ticular measures  which  it  may  be  advisable  to  adopt  in 
respect  to  each. 

In  order  to  a  better  judgment  of  the  means  proper  to 
be  resorted  to  by  the  United  States,  it  will  be  of  use 
to  advert  to  those  whicli  have  been  em})loyed  with  suc- 
cess in  other  countries.     Tlie  principal  of  these  are  :  — 

1.  Protecting  duties,  or  duties  on  those  foreign  articles 
which  are  the  rivals  of  the  domestic  ones  intended  to  he 
encouraged. 

Duties  of  this  nature  evidently  amount  to  a  virtual 
bounty  on  the  domestic  fabrics,  since  by  enhancing  the 
charges  on  foreign  articles  they  enable  the  national 
manufacturers  to  undersell  all  their  foreign  competi- 
tors. The  propriety  of  this  species  of  encouragement 
need  not  be  dwelt  upon,  as  it  is  not  only  a  clear  result 
from  the  numerous  topics  which  have  been  suggested, 
but  is  sanctioned  by  the  laws  of  the  United  States  in 
a  variety  of  instances  ;  it  has  the  additional  recommen- 
dation of  being  a  resource  of  revenue.  Indeed,  all  the 
duties  imposed  on  imported  articles,  though  with  an 
exclusive  view  to  revenue,  have  the  effect  in  contem- 
plation ;  and,  except  where  they  fall  on  raw  materials, 


B'EPORT  ON  MANUFACTURES.  63 

wear  a  beneficent  aspect  towards  the  manufactures  of 
the  country. 

2.  Pi'ohUntions  of  rival  articles,  or  duties  equivalent 
to  proliihitions. 

This  is  another  and  an  efiicacious  mean  of  encour- 
aging national  manufactures  ;  but  in  general  it  is  only 
fit  to  be  employed  when  a  manufacture  has  made  such 
a  progress,  and  is  in  so  many  hands,  as  to  insure  a  due 
competition  and  an  adequate  supply  on  reasonable  terms. 
Of  duties  equivalent  to  prohibitions  there  are  examples 
in  the  laAvs  of  the  United  States  ;  and  there  are  other 
cases  to  which  tlie  principle  may  be  advantageously  ex- 
tended, but  they  are  not  numerous. 

Considering  a  monopoly  of  the  domestic  market  to  its 
own  manufacturers  as  the  reigning  policy  of  manufac- 
turing nations,  a  similar  policy  on  the  part  of  the 
United  States,  in  every  proper  instance,  is  dictated,  it 
might  almost  be  said,  by  the  principles  of  distributive 
justice  ;  certainly  by  the  duty  of  endeavoring  to  secure 
to  their  own  citizens  a  reciprocity  of  advantages. 

3.  Prohibitions  of  the  exportation  of  the  materials  of 
manvfactio'es. 

The  desire  of  securing  a  cheap  and  plentiful  supply 
for  the  national  workmen  ;  and,  where  the  article  is 
either  peculiar  to  the  country,  or  of  peculiar  quality 
there,  the  jealousy  of  enabling  foreign  workmen  to 
rival  those  of  the  nation  with  its  own  materials,  are 
the  leading  motives  to  this  species  of  regulation.  It 
ought  not  to  be  affirmed  that  it  is  in  no  instance 
proper,  but  it  is  certainly  one  which  ought  to  be  adopted 
with  great  circumspection  and  oidy  in  very  plain  cases. 
It  is  seen  at  once  that  its  immediate  operation  is  to 
abridge  the  demand  and  keep  down  the  price  of  the 
produce  of  some  other  branch  of  industry,  generally 
speaking  of  agriculture,  to  the  prejudice  of  those  who 
carry  it  on ;  and  though  if  it  be  really  essential  to  the 


64  ALEX  AN  DEB  HAMILTON. 

prosperity  of  any  very  important  national  manufacture 
it  nuiy  liapi)en  that  those  who  are  injured  in  the  first 
instance  may  be  eventually  indemnified  by  the  superior 
steadiness  of  an  extensive  domestic  market  depending 
on  that  prosperity,  yet,  in  a  matter  in  which  there  is 
so  much  room  for  nice  and  difficult  combinations,  in 
which  such  opposite  considerations  combat  each  other, 
prudence  seems  to  dictate  that  the  expedient  in  qu.es- 
tion  ought  to  be  indulged  with  a  sparing  hand. 

4.    Pecuniary  bounties. 

This  has  been  found  one  of  the  most  efficacious 
means  of  encoiiraging  manufactures,  and  it  is,  in  some 
views,  the  best,  though  it  has  not  yet  been  practiced 
upon  the  government  of  the  United  States,  — ,  unless 
the  allowance  on  the  exportation  of  dried  and  pickled 
fish  and  salted  meat  could  be  considered  as  a  bounty, 
—  and  though  it  is  less  favored  by  public  opinion  than 
some  other  modes.     Its  advantages  are  these  :  — 

1.  It  is  a  species  of  encouragement  more  positive 
and  direct  than  any  other,  and  for  that  very  reason  has 
a  more  immediate  tendency  to  stimulate  and  uphold 
new  enterprises,  increasing  the  chances  of  profit,  and 
diminishing  the  risks  of  loss  in  the  first  attempts. 

2.  It  avoids  the  inconvenience  of  a  temporary  aug- 
mentation of  price,  which  is  incident  to  some  other 
modes,  or  it  produces  it  to  a  less  degree,  either  by  mak- 
ing no  addition  to  the  charges  on  the  rival  foreign  ar- 
ticle, as  in  the  case  of  protecting  duties,  or  by  making 
a  smaller  addition.  The  first  happens  when  the  fund 
for  the  bounty  is  derived  from  a  different  object  (which 
may  or  may  not  increase  the  price  of  some  other  article 
according  to  the  nature  of  that  object)  ;  the  second, 
when  the  fund  is  derived  from  the  same  or  a  similar 
object  of  foreign  manufacture.  One  per  cent,  duty  on 
the  foreign  article,  converted  into  a  bounty  on  the  do- 
mestic, will  have  an  equal  effect  with  a  duty  of  2% 


REPORT  ON  MANUFACTURES.  65 

exclusive  of  such  bounty ;  and  the  price  of  the  foreign 
commodity  is  liable  to  be  raised  in  the  one  case  in  the 
proportion  of  1%,  in  the  other  in  that  of  2%.  Indeed, 
the  bounty,  when  drawn  from  another  source,  is  calcu- 
lated to  promote  a  reduction  of  price,  because,  without 
laying  any  new  charge  on  the  foreign  article,  it  serves 
to  introduce  a  competition  with  it,  and  to  increase  the 
.  total  quantity  of  the  article  in  the  market. 

3.  Bounties  have  not,  like  high  protecting  duties,  a 
tendency  to  produce  scarcity.  An  increase  of  price  is 
not  always  the  immediate,  though  where  the  progress 
of  a  domestic  manufacture  does  not  counteract  a  rise, 
it  is  commonly  the  ultimate  effect  of  an  additional 
duty.  In  the  interval  between  the  laying  of  the  duty 
and  a  proportional  increase  of  price,  it  may  discourage 
importation  by  interfering  with  the  profits  to  be  ex- 
pected from  the  sale  of  the  article. 

4.  Bounties  are  sometimes  not  only  the  best,  but  the 
only  proper  expedient  for  uniting  the  encouragement  of 
a  new  object  of  agriculture  with  that  of  a  new  object 
of  manufacture.  It  is  the  interest  of  the  farmer  to 
have  the  production  of  the  raw  material  promoted  by 
counteracting  the  interference  of  the  foreign  material 
of  the  same  kind.  It  is  the  interest  of  the  manufac- 
turer to  have  the  material  abundant  and  cheap.  If, 
prior  to  the  domestic  production  of  the  material  in  suffi- 
cient quantity  to  supply  the  manufacturer  on  good 
terms,  a  duty  be  laid  upon  the  importation  of  it  from 
abroad,  with  a  view  to  promote  the  raising  of  it  at 
home,  the  interest  both  of  the  farmer  and  manufacturer 
will  be  disserved.  By  either  destroying  the  requisite 
supply,  or  raising  the  price  of  the  article  beyond  what 
can  be  afforded  to  be  given  for  it  by  the  conductor  of 
an  infant  manufacture,  it  is  abandoned  or  fails  ;  and 
there  being  no  domestic  manufactories  to  create  a  de- 
mand for  the  raw  material  which  is  raised  by  the  farmer, 


I 


66  ALEXANDER  HAMILTON. 

it  is  in  vain  that  the  competition  of  the  like  foreign  ar- 
ticle may  have  been  destroyed. 

It  cannot  escape  notice  that  a  duty  upon  the  impor- 
tation of  an  article  can  no  otherwise  aid  the  domestic 
production  of  it  than  by  giving  the  latter  greater  ad- 
vantages in  the  home  market.  It  can  have  no  influ- 
ence upon  the  advantageous  sale  of  the  article  produced 
in  foreign  markets,  no  tendency,  therefore,  to  promote 
its  exportation. 

The  true  way  to  conciliate  these  two  interests  is  to 
lay  a  duty  on  foreign  manufactures  of  the  material,  the 
growth  of  which  is  desired  to  be  encouraged,  and  to 
apply  the  produce  of  that  duty  by  way  of  bounty  either 
upon  the  production  of  the  material  itself,  or  upon  its 
manufacture  at  home,  or  upon  both.  In  this  disposi- 
tion of  the  thing  the  manufacturer  commences  his  en- 
terprise xinder  every  advantage  which  is  attainable  as 
to  quantity  or  price  of  the  raw  material.  And  the 
farmer,  if  the  bounty  be  immediately  to  him,  is  enabled 
by  it  to  enter  into  a  successful  competition  with  the 
foreign  material.  If  the  bounty  be  to  the  manufacturer 
on  so  much  of  the  domestic  material  as  he  consumes, 
the  operation  is  nearly  the  same ;  he  has  a  motive  of 
interest  to  prefer  the  domestic  commodity,  if  of  equal 
quality,  even  at  a  higher  price  than  the  foreign,  so  long 
as  the  difference  of  price  is  anything  short  of  the 
bounty  which  is  allowed  upon  the  article. 

Except  the  simple  and  ordinary  kinds  of  household 
manufacture,  or  those  for  which  there  are  very  com- 
manding local  advantages,  pecuniary  bounties  are  in 
most  cases  indispensable  to  the  introduction  of  a  new 
branch.  A  stimulus  and  a  support,  not  less  powerful 
and  direct,  is,  generally  speaking,  essential  to  the  over- 
coming of  the  obstacles  which  arise  from  the  competi- 
tions of  superior  skill  and  maturity  elsewhere.  Boun- 
ties are  especially  essential  in  regard  to  articles  upon 


REPORT  ON  MANUFACTURES.  67 

which  those  foreigners,  who  have  been  accustomed  to 
siipply  a  country,  are  in  the  practice  of  granting  them. 

The  continuance  of  bounties  on  manufactures  loner 
established  must  almost  always  be  of  questionable  pol- 
icy, because  a  presumption  would  arise  in  every  such, 
case  that  there  were  natural  and  inherent  impediments 
to  success.  But  in  new  undertakings  they  are  as  justi- 
fiable as  they  are  oftentimes  necessary. 

There  is  a  degree  of  prejudice  against  bounties,  from 
an  appearance  of  giving  away  the  public  money  without 
an  immediate  consideration,  and  from  a  supposition  that 
they  serve  to  enrich  particular  classes  at  the  expense 
of  the  community. 

But  neither  of  these  sources  of  dislike  will  bear  a 
serious  examination.  There  is  no  purpose  to  which 
public  money  can  be  more  beneficially  applied  than  to 
the  acquisition  of  a  new  and  useful  branch  of  industry, 
no  consideration  more  valuable  than  a  permanent  addi- 
tion to  the  general  stock  of  productive  labor. 

As  to  the  second  source  of  objection,  it  equally  lies 
against  other  modes  of  encouragement,  which  are  ad- 
mitted to  be  eligible.  As  often  as  a  duty  upon  a  for- 
eign article  makes  an  addition  to  its  price,  it  causes  an 
extra  expense  to  the  community  for  the  benefit  of  the 
domestic  manufacturer.  A  bounty  does  no  more.  But 
it  is  the  interest  of  the  society  in  each  case  to  submit  to 
a  temporary  expense,  which  is  more  than  compensated 
by  an  increase  of  industry  and  wealth,  by  an  augmenta- 
tion of  resources  and  independence,  and  by  the  circum- 
stance of  eventual  cheajuiess,  which  has  been  noticed  in 
another  place. 

It  would  deserve  attention,  however,  in  the  employ- 
ment of  this  species  of  encouragement  in  the  United 
States,  as  a  reason  for  moderating  the  degree  of  it  in 
the  instances  in  which  it  might  be  deemed  eligible, 
that  the  great  distance  of  this  country  from  Europe 


68  ALEXANDER  HAMILTON. 

imposes  very  heavy  charges  on  all  the  fabrics  which 
are  brought  from  thence,  amounting  from  15%  to  30% 
on  their  value,  according  to  their  bulk. 

A  question  has  been  made  concerning  the  constitu- 
tional right  of  the  Government  of  the  United  States  to 
apply  this  species  of  encouragement;  but  there  is  cer- 
tainly no  good  foundation  for  such  a  question.  The 
national  legislature  has  express  authority  "  to  lay  and 
collect  taxes,  duties,  imposts,  and  excises  ;  to  pay  the 
debts,  and  i)rovide  for  the  common  defense  and  general 
welfare,"  with  no  other  qualifications  than  that  "  all  du- 
ties, imposts,  and  excises  shall  be  uniform  throughout 
the  United  States  ;  that  no  capitation  or  other  direct  tax 
shall  be  laid,  unless  in  proportion  to  numbers  ascer- 
tained by  a  census,  or  enumeration  taken  on  the  prin- 
ciples prescribed  in  the  Constitution,"  and  that  "  no 
tax  or  duty  shall  be  laid  on  articles  exported  from  any 
State." 

These  three  qualifications  excepted,  the  power  to 
raise  money  is  plenary  and  indefinite  ;  and  the  objects 
to  which  it  may  be  appropriated  are  no  less  comprehen- 
sive than  the  payment  of  the  public  debts,  and  the 
providing  for  the  common  defense  and  general  welfare. 
The  terms  "  general  welfare  "  were  doubtless  intended 
to  signify  more  than  was  expressed  or  imported  in  those 
which  preceded  ;  otherwise  numerous  exigencies  inci- 
dent to  the  affairs  of  a  nation  would  have  been  left 
without  a  provision.  The  phrase  is  as  comprehensive 
as  any  that  could  have  been  used  ;  because  it  was  not 
fit  that  the  constitutional  authority  of  the  Union  to 
appropriate  its  revenues  should  have  been  restricted 
within  narrower  limits  than  the  "  general  welfare  ;  " 
and  because  this  necessarily  embraces  a  vast  variety 
of  particulars,  which  are  susceptible  neither  of  specifi- 
cation nor  of  definition. 

It  is  therefore  of  necessity  left  to  the  discretion  of 


REPORT  ON  MANUFACTURES.  69 

the  national  legislature  to  pronounce  upon  the  objects 
which  concern  the  general  welfare,  and  for  which,  under 
that  description,  an  appropriation  of  money  is  requisite 
and  proper.  And  there  seems  to  be  no  room  for  a  doubt 
that  whatever  concerns  the  general  interests  of  learn- 
ing, of  agriculture,  of  manufactures,  and  of  commerce, 
are  within  the  sphere  of  the  national  councils,  as  far  as 
regards  an  application  of  money. 

The  only  qualification  of  the  generality  of  the  phrase 
in  question  which  seems  to  be  admissible,  is  this  :  that 
the  object  to  which  an  appropriation  of  money  is  to  be 
made  be  general  and  not  local ;  its  operation  extending 
in  fact,  or  by  possibility,  throughout  the  Union,  and  not 
being  confined  to  a  particular  spot. 

No  objection  ought  to  arise  to  this  construction,  from 
a  supposition  that  it  would  imply  a  power  to  do  what- 
ever else  should  appear  to  Congress  conducive  to  the 
general  welfare.  A  power  to  appropriate  money  with 
this  latitude  which  is  granted  too  in  express  terms, 
would  not  carry  a  power  to  do  any  other  thing,  not  au- 
thorized in  the  Constitution,  either  expressly  or  by  fair 
implication, 

5.  Prernlums. 

These  are  of  a  nature  allied  to  bounties,  though  dis- 
tinguishable from  them  in  some  important  features. 

Bounties  are  applicable  to  the  whole  quantity  of  an 
article  produced  or  manufactured  or  exported,  and  in- 
volve a  correspondent  expense.  Premiums  serve  to  re- 
ward some  particular  excellence  or  superiority,  some 
extraordinary  exertion  or  skill,  and  are  dispensed  only 
in  a  small  number  of  cases.  I>ut  their  effect  is  to 
stimulate  general  effort;  contrived  so  as  to  be  both 
honorary  and  lucrative,  they  address  themselves  to  dif- 
ferent passions,  touching  the  chords  as  well  of  emula- 
tion as  of  interest.  They  are,  accordingly,  a  very 
economical  mean  of  exciting  the  enterprise  of  a  whole 
community. 


70  ALEXANDER  HAMILTON. 

There  are  various  societies  in  different  countries, 
whose  object  is  the  dispensation  of  premiums  for  the 
encouragement  of  agriculture,  arts,  manufactures  and 
commerce,  and  thougli  they  are  for  the  most  part  volun- 
tary associations,  with  comparatively  slender  funds, 
their  utility  has  been  immense.  Much  has  been  done 
by  this  mean  in  Great  Britain.  Scotland  in  particular 
owes  materially  to  it  a  prodigious  jnelioration  of  con- 
dition. From  a  similar  establishment  in  the  United 
States,  supplied  and  supported  by  the  Government  of  the 
Union,  vast  benefits  might  reasonably  be  expected. 
Some  further  ideas  on  this  head  shall  accordingly  be 
submitted  in  the  conclusion  of  this  report. 

6.  TAe  exemjit'ion  of  the  materials  of  manufactures 
from  duty. 

The  policy  of  that  exemption,  as  a  general  rule,  par- 
ticularly in  reference  to  new  establishments,  is  obvious. 
It  can  hardly  ever  be  advisable  to  add  the  obstructions 
of  fiscal  burdens  to  the  difficulties  which  naturally  em- 
barrass a  new  manufacture  ;  and  where  it  is  matured, 
and  in  condition  to  become  an  object  of  revenue,  it  is, 
generally  speaking,  better  that  the  fabric,  than  the 
material,  should  be  the  subject  of  taxation.  Ideas  of 
proportion  between  the  quantum  of  the  tax  and  the 
value  of  the  article  can  be  more  easily  adjusted  in  the 
former  than  in  the  latter  case.  An  argument  for  ex- 
emptions of  this  kind  in  the  United  States  is  to  be 
derived  from  the  ])ractice,  as  far  as  their  necessities 
have  permitted,  of  those  nations  whom  we  are  to  meet 
as  competitors  in  our  own  and  in  foreign  markets. 

There  are,  however,  excejitions  to  it,  of  which  some 
examples  will  be  given  under  the  next  head. 

The  laws  of  the  Union  afford  instances  of  the  ob- 
servance of  the  policy  here  recommended,  but  it  will 
probably  be  found  advisable  to  extend  it  to  some  other 
cases.      Of   a   nature    bearing    some    affinity   to    that 


REPORT  ON  MANUFACTURES.  71 

policy  is  the  regulation  which  exempts  from  duty  the 
tools  and  implements,  as  well  as  the  books,  clothes  and 
household  furniture,  of  foreign  artists  who  come  to  re- 
side in  the  United  States  ;  an  advantage  already  secured 
to  them  by  the  laAvs  of  the  Union,  and  which  it  is  in 
every  view  proper  to  continue. 

7.  Draxvbacks  of  the  duties  which  are  imjiosed  on  the 
materials  of  manufactures. 

It  has  already  been  observed  as  a  general  rule,  that 
duties  on  those  materials  ought,  with  certain  exceptions, 
to  be  forborne.  Of  these  exceptions,  three  cases  occur 
which  may  serve  as  examples.  One,  where  the  material 
is  itself  an  object  of  general  or  extensive  consumption, 
and  a  fit  and  productive  source  of  revenue.  Another, 
where  a  manufacture  of  a  simpler  kind,  the  competi- 
tion of  which  with  a  like  domestic  article  is  desired  to 
be  restrained,  partakes  of  the  nature  of  a  raw  material 
from  being  capable  by  a  further  process  to  be  converted 
into  a  manufacture  of  a  different  kind,  the  introduction 
or  growth  of  which  is  desired  to  be  encouraged.  A 
third,  where  the  material  itself  is  the  production  of  the 
country,  and  in  sufficient  abundance  to  furnish  a  cheap 
and  plentiful  supply  to  the  national  manufacturers. 

Under  the  first  description  comes  the  article  of  mo- 
lasses. It  is  not  only  a  fair  object  of  revenue,  but  being 
a  sweet,  it  is  just  that  the  consumers  of  it  should  pay 
a  duty  as  well  as  the  consumers  of  sugar. 

Cottons  and  linens  in  their  white  state  fall  under  the 
second  description.  A  duty  upon  such  as  are  imported 
is  proper  to  promote  the  domestic  manufacture  of  sim- 
ilar articles  in  the  same  state ;  a  drawback  of  that 
duty  is  proper  to  encourage  the  printing  and  stain- 
ing at  home  of  those  which  are  brought  from  abroad. 
When  the  first  of  these  manufactures  has  attained  suffi- 
cient maturity  in  a  country  to  furnish  a  full  supply  for 
the  second,  the  utility  of  the  drawback  ceases. 


72  ALEXANDER  HAMILTON. 

The  article  of  hemp  either  now  does  or  may  be  ex- 
pected soon  to  exemplify  the  third  case  in  the  United 
States. 

Where  duties  on  the  materials  of  manufactures  are 
not  laid  for  the  purpose  of  preventing  a  competition 
with  some  domestic  production,  the  same  reasons  Avhich 
recommend,  as  a  general  rule,  the  exemption  of  those 
materials  from  duties,  would  recommend,  as  a  like  gen- 
eral rule,  the  allowance  of  drawbacks  in  favor  of  the 
manufacturer.  Accordingly,  such  drawbacks  are  fami- 
liar in  countries  which  systematically  pursue  the  busi- 
ness of  manufactures,  whicli  furnishes  an  argument  for 
the  observance  of  a  similar  policy  in  the  United  States ; 
and  the  idea  has  been  adopted  by  the  laws  of  the  Union, 
in  the  instances  of  salt  and  molasses.  It  is  believed 
that  it  will  be  found  advantageous  to  extend  it  to  some 
other  articles. 

8.  The  encouragement  of  new  inventions  and  discov- 
eries at  home,  and  of  the  introduction  into  the  United 
States  of  such  as  may  have  been  made  in  other  countries  ; 
"particularly  those  which  relate  to  machinery. 

This  is  among  the  most  useful  and  unexceptionable 
of  the  aids  which  can  be  given  to  manufactures.  The 
usual  means  of  that  encouragement  are  pecuniary  re- 
wards, and,  for  a  time,  exclusive  privileges.  The  first 
must  be  employed  according  to  the  occasion  and  the 
utility  of  the  invention  or  discovery.  For  the  last,  so 
far  as  respects  "  authors  and  inventors,"  provision  has 
been  made  by  law.  But  it  is  desirable,  in  regard  to  im- 
provements and  secrets  of  extraordinary  value,  to  be 
able  to  extend  the  same  benefit  to  introducers  as  well  as 
authors  and  inventors ;  a  policy  which  has  been  prac- 
ticed with  advantage  in  other  countries.  Here,  how- 
ever, as  in  some  other  cases,  there  is  cause  to  regret 
that  the  competency  of  the  authority  of  the  national 
Government  to  the  good  which  might  be  done,  is  not 


REPORT  ON  MANUFACTURES.  73 

without  a  question.  Many  aids  might  be  given  to  indus- 
try, many  internal  improvements  of  primary  magnitude 
might  be  promoted,  by  an  authority  operating  through- 
out the  Union,  which  cannot  be  effected  as  well,  if  at 
all,  by  an  authority  confined  within  the  limits  of  a  single 
State. 

But  if  the  Legislature  of  the  Union  cannot  do  all 
the  good  that  might  be  wished,  it  is  at  least  desirable 
that  all  may  be  done  which  is  practicable.  Means  for 
promoting  the  introduction  of  foreign  improvements, 
though  less  efficaciously  than  might  be  accomplished 
Avith  more  adequate  authority,  will  form  a  part  of  the 
plan  intended  to  be  submitted  in  the  close  of  this  report. 

It  is  customary  with  manufacturing  nations  to  pro- 
hibit, under  severe  penalties,  the  exportation  of  imple- 
ments and  machines  which  they  have  either  invented 
or  improved.  There  are  already  objects  for  a  similar 
regulation  in  the  United  States,  and  others  may  be  ex- 
pected to  occur  from  time  to  time.  The  adoption  of  it 
seems  to  be  dictated  by  the  principle  of  reciprocity. 
Greater  liberality  in  such  respects  might  better  com- 
port with  the  general  spirit  of  the  country  ;  but  a  selfish 
and  exclusive  policy  in  other  quarters  will  not  always 
permit  the  free  indulgence  of  a  spirit  which  would  place 
us  upon  an  unequal  footing.  As  far  as  prohibitions 
tend  to  prevent  foreign  competitors  from  deriving  the 
benefit  of  the  improvements  made  at  home,  they  tend 
to  increase  the  advantages  of  those  by  whom  they 
have  been  introduced,  and  operate  as  an  encouragement 
to  exertion. 

9.  Judicious  regulations  for  the  inspection  of  mami- 
facturod  commodities. 

This  is  not  among  the  least  important  of  the  means 
by  which  the  prosperity  of  manufactures  may  be  jiro- 
moted.  It  is  indeed  in  many  cases  one  of  the  most  es- 
sential.  Contributing  to  prevent  frauds  upon  consumers 


T4  ALEXANDER  HAMILTON. 

at  liome  and  exporters  to  foreign  countries,  to  improve 
the  quality  and  preserve  the  character  of  the  national 
manufactures  ;  it  cannot  fail  to  aid  the  expeditious  and 
advantageoxts  sale  of  them,  and  to  serve  as  a  guard 
against  successfvd  competition  from  other  quarters.  The 
reputation  of  the  flour  and  lumber  of  some  States  and  of 
the  potash  of  others  has  been  established  by  an  attention 
to  this  point ;  and  the  like  good  name  might  be  procured 
for  those  articles,  wheresoever  produced,  by  a  judicious 
and  uniform  system  of  inspection  throughout  the  ports 
of  the  United  States.  A  like  system  might  also  be  ex- 
tended with  advantage  to  other  commodities. 

10.  The  facilitati7uj  of  jjecuniary  remittances  from 
place  to  2)lace  — 

Is  a  point  of  considerable  moment  to  trade  in  general 
and  to  manufactures  in  particular,  by  rendering  more 
easy  the  purchase  of  raw  materials  and  })ro visions,  and 
the  payment  for  manufactured  supplies.  A  general 
circulation  of  bank  paper,  which  is  to  be  expected  from 
the  institution  lately  established,  will  be  a  most  valuable 
mean  to  this  end.  But  much  good  would  also  accrue 
from  some  additional  provisions  respecting  inland  bills 
of  exchange.  If  those  drawn  in  one  State,  payable  in 
another,  were  made  negotiable  everywhere,  and  interest 
and  damages  allowed  in  case  of  protest,  it  would  greatly 
promote  negotiations  between  the  citizens  of  different 
States,  by  rendering  them  more  secure  ;  and  with  it  the 
convenience  and  advantage  of  tlie  merchants  and  manu- 
facturers of  each. 

11.  The  facilitating  of  the  transportation  of  commodi- 
ties. 

Improvements  favoring  this  object  intimately  con- 
cern all  the  domestic  interests  of  a  community  ;  but 
they  may,  without  impropriety,  be  mentioned  as  having 
an  important  relation  to  manufactures.  There  is  per- 
haps scarcely  anything  which  has  been  better  calculated 


REPOBT  ON  MANUFACTURES.  75 

to  assist  the  manufactures  of  Great  Britain  than  the 
meliorations  of  the  public  roads  of  that  kingdom,  and 
the  great  progress  which  has  been  of  late  made  in  open- 
ing canals.  Of  the  former  the  United  States  stand 
much  in  need ;  for  the  latter  they  present  uncommon 
facilities.  •    ■ 

The  symptoms  of  attention  to  the  improvement  of 
inland  navigation,  which  have  lately  appeared  in  some 
quarters,  must  fill  with  pleasure  every  breast  warmed 
with  a  true  zeal  for  the  prosperity  of  the  country.  These 
examples,  it  is  to  be  hoped,  will  stimulate  the  exertions 
of  the  government  and  citizens  of  every  State.  There 
can  certainly  be  no  object  more  worthy  of  the  cares  of 
the  local  administrations  ;  and  it  were  to  be  wished  that 
there  was  no  doubt  of  the  power  of  the  national  Govern- 
ment to  lend  its  direct  aid,  on  a  comprehensive  plan. 
This  is  one  of  those  improvements  which  could  be  prose- 
cuted with  more  efficacy  by  the  whole  than  by  any  part 
or  parts  of  the  Union.  There  are  cases  in  which  the 
general  interest  will  be  in  danger  to  be  sacrificed  to  the 
collision  of  some  supposed  local  interests.  Jealousies 
in  matters  of  this  kind  are  as  apt  to  exist  as  they  are 
apt  to  be  erroneous. 

The  following  remarks  are  sufficiently  judicious  and 
pertinent  to  deserve  a  literal  quotation  :  "  Good  roads, 
canals,  and  navigable  rivers,  by  diminishing  the  expense 
of  carriage,  put  the  remote  parts  of  a  country  more 
nearly  upon  a  level  with  those  in  the  neighborhood  of 
the  town.  They  are  upon  that  account  the  greatest 
of  all  improvements.  They  encourage  the  cultivation  of 
the  remote,  which  must  always  be  the  most  extensive 
circle  of  the  country.  They  are  advantageous  to  the 
town,  by  breaking  down  the  monopoly  of  the  country  in 
its  neighborhood.  They  are  advantageous  even  -to  that 
part  of  the  country.  Though  they  introduce  some  rival 
commodities  into  the  old  market,  they  open  many  new 


76  ALEXANDER  HAMILTON. 

markets  to  its  ]n-oduce.  Monopoly,  besides,  is  a  great 
enemy  to  good  management,  which  can  never  be  uni- 
versally established,  but  in  consequence  of  that  free 
and  universal  competition  which  forces  everybody  to 
have  recourse  to  it  for  the  sake  of  self-defense.  It  is 
not  more  than  fifty  years  ago  that  some  of  the  counties 
in  the  neighborhood  of  London  petitioned  the  Parlia- 
ment against  the  extension  of  the  turnpike  roads  into 
the  remoter  counties.  These  remoter  counties,  they 
pretended,  from  the  cheapness  of  labor  would  be  able 
to  sell  their  grass  and  corn  cheaper  in  the  London 
market  thau  themselves,  and  they  would  thereby  reduce 
their  rents  and  ruin  their  cultivation.  Their  rents, 
however,  have  risen  and  their  cultivation  has  been  im- 
proved since  that  time." 

Specimens  of  a  spirit  similar  to  that  which  governed 
the  counties  here  spoken  of  present  themselves  too  fre- 
quently to  the  eye  of  an  impartial  observer,  and  render 
it  a  wish  of  patriotism,  that  the  body  in  this  country 
in  whose  councils  a  local  or  partial  sj^irit  is  least  likely 
to  predominate,  were  at  liberty  to  pursue  and  promote 
the  general  interest  in  those  instances  in  which  there 
might  be  danger  of  the  interference  of  such  a  spirit. 

The  foregoing  are  the  principal  of  the  means  by  which 
the  growth  of  manufactures  is  ordinarily  promoted.  It 
is,  however,  not  merely  necessary  that  the  measures  of 
government  which  have  a  direct  view  to  manufactures 
should  be  calculated  to  assist  and  protect  them ;  but 
that  those  which  only  collaterally  affect  them,  in  the 
general  course  of  the  administration,  should  be  guarded 
from  any  peculiar  tendency  to  injure  them. 

There  are  certain  species  of  taxes  which  are  apt  to  be 
oppressive  to  different  parts  of  the  community,  and, 
among*  other  ill  effects,  have  a  very  unfriendly  aspect 
towards  manufactures.  All  poll  or  capitation  taxes  are 
of  this  nature.      They  either   proceed  according  to  a 


REPORT  ON  MANUFACTURES.  77 

fixed  rate,  which  operates  unequally  and  injuriously  to 
the  industrious  poor ;  or  they  vest  a  discretion  in  cer- 
tain officers  to  make  estimates  and  assessments,  which 
are  necessarily  vague,  conjectural,  and  liable  to  abuse. 
They  ought,  therefore,  to  be  abstained  from  in  all  but 
cases  of  distressing  emergency. 

All  such  taxes  (including  all  taxes  on  occupations) 
which  proceed  according  to  the  amount  of  capital  sup- 
posed to  be  employed  in  a  business,  or  of  profits  supposed 
to  be  made  in  it,  are  unavoidably  hurtful  to  industry. 
It  is  in  vain  that  the  evil  may  be  endeavored  to  be  miti- 
gated by  leaving  it,  in  the  first  instance,  in  the  option 
of  the  party  to  be  taxed,  to  declare  the  amount  of  his 
capital  or  profits. 

Men  engaged  in  any  trade  or  business  have  commonly 
weighty  reasons  to  avoid  disclosures  which  would  ex- 
pose, with  anything  like  accuracy,  the  real  state  of  their 
afi^airs.  They  most  frequently  find  it  better  to  risk  op- 
pression, than  to  avail  themselves  of  so  inconvenient  a 
refuge  ;  and  the  consequence  is  that  they  often  suffer 
oppression. 

When  the  disclosure,  too,  if  made,  is  not  definitive, 
but  controllable  by  the  discretion,  or  in  other  words 
by  the  passions  and  prejudices,  of  the  revenue  officers, 
it  is  not  only  an  ineffectual  protection,  but  the  possibil- 
ity of  its  being  so  is  an  additional  reason  for  not  resort- 
ing to  it. 

Allowing  to  the  pu])lic  officers  the  most  equitable  dis- 
positions, yet  where  tliey  are  to  exercise  a  discretion 
without  certain  data,  they  cannot  fail  to  be  often  misled 
by  appearances.  The  quantity  of  business  which  seems 
to  be  going  on  is  in  a  vast  number  of  cases  a  very  de- 
ceitful criterion  of  the  profits  which  are  made  ;  yet  it 
is,  perhaps,  the  best  they  can  have,  and  it  is  the  one  on 
which  they  will  most  naturally  rely.  A  business,  there- 
fore, which  may  rather  require  aid  from  the  government 


78  ALEXANDER  HAMILTON. 

than  be  in  a  capacity  to  be  contribntoiy  to  it,  may  find 
itself  crushed,  by  the  mistaken  conjectures  of  the  as^s- 
sors  of  taxes. 

Arbitrary  taxes,  under  which  denomination  are  com- 
prised all  those  that  leave  the  quantum  of  the  tax  to 
be  raised  on  each  person  to  the  discretion  of  certain 
officers,  are  as  contrary  to  the  genius  of  liberty  as  to 
the  maxims  of  industry.  In  this  light  .they  have  been 
viewed  by  the  most  judicious  observers  on  government, 
who  have  bestowed  upon  them  the  severest  epithets  of 
reprobation,  as  constituting  one  of  the  worst  features 
usually  to  be  met  with  in  the  practice  of  despotic  gov- 
ernments. 

It  is  certain,  at  least,  that  such  taxes  are  particularly 
inimical  to  the  success  of  manufacturing  industry,  and 
ought  carefully  to  be  avoided  by  a  government  which 
desires  to  promote  it. 

The  great  copiousness  of  the  subject  of  this  report 
has  insensibly  led  to  a  more  lengthy  preliminary  dis- 
cussion than  was  originally  contemplated  or  intended. 
It  appeared  proper  to  investigate  principles,  to  consider 
objections,  and  to  endeavor  to  establish  the  utility  of  the 
thing  proposed  to  be  encouraged,  previous  to  a  specifica- 
tion of  the  objects  which  might  occur  as  meriting  or  re- 
quiring encouragement,  and  of  the  measures  which  might 
be  proper  in  respect  to  each.  The  first  purpose  having 
been  fulfilled,  it  remains  to  pursue  the  second. 

In  the  selection  of  objects,  five  circumstances  seem 
entitled  to  particular  attention  :  the  capacity  of  the  coun- 
try to  furnish  the  raw  material ;  the  degree  in  which 
the  nature  of  the  manufacture  admits  of  a  substitute 
for  manual  labor  in  machinery  ;  the  facility  of  execu- 
tion ;  the  extensiveness  of  the  uses  to  which  the  article 
can  be  applied  ;  its  subserviency  to  other  interests,  par- 
ticularly the  great  one  of  national  defense.  There  are, 
however,  objects  to  which  these  circumstances  are  little 


REPORT  ON  MANUFACTURES.  79 

applicable,  which,  for  some  special  reasons,  may  have 
a  claim  to  encouragement. 

A  designation  of  the  principal  raw  material  of  which 
each  manufacture  is  composed  will  serve  to  introduce 
the  remarks  upon  it ;  as,  in  the  first  place, 

IRON. 

The  manufactures  of  this  article  are  entitled  to  pre- 
eminent rank.  None  are  more  essential  in  their  kinds, 
nor  so  extensive  in  their  uses.  They  constitute,  in 
whole  or  in  part,  the  implements  or  the  materials,  or 
both,  of  almost  every  useful  occupation.  Their  instru- 
mentality is  everywhere  conspicuous. 

It  is  fortunate  for  the  United  States  that  they  have 
pecidiar  advantages  for  deriving  the  full  benefit  of 
this  most  valuable  material,  and  they  have  every  mo- 
tive to  improve  it  with  systematic  care.  It  is  to  be 
found  in  various  parts  of  the  United  States  in  great 
abundance,  and  of  almost  every  quality  ;  and  fuel,  the 
chief  instrument  in  manufacturing  it,  is  both  cheap  and 
plenty.  This  particularly  applies  to  charcoal ;  but 
there  are  productive  coal  mines  already  in  operation, 
and  strong  indications  that  the  material  is  to  be  found 
in  abundance  in  a  variety  of  other  places. 

The  inquiries  to  which  the  subject  of  this  report  has 
led  have  been  answered  with  proofs,  that  manufactories 
of  iron,  though  generally  understood  to  be  extensive, 
are  far  more  so  than  is  commonly  supposed.  The  kinds 
in  which  the  greatest  progress  has  been  made  have  been 
mentioned  in  another  place,  and  need  not  be  repeated ; 
but  there  is  little  doubt  that  every  other  kind,  with  due 
cultivation,  will  rapidly  succeed.  It  is  worthy  of  re- 
mark that  several  of  the  particular  trades  of  which  it 
is  the  basis  are  capal)le  of  being  carried  on  without 
the  aid  of  large  capitals. 

Iron   works    have   greatly  increased   in  the    United 


80  ALEXANDER  HAMILTON. 

States,  and  are  prosecuted  with  much  more  advantage 
than  formerly.  The  average  price  before  the  Revolu- 
tion was  about  $64  per  ton ;  at  present  it  is  about 
f  80,  —  a  rise  which  is  chiefly  to  be  attributed  to  the 
increase  of  manufactures  of  the  material. 

The  still  further  extension  and  multiplication  of  such 
manufactures  will  have  the  double  effect  of  promoting 
the  extraction  of  the  metal  itself,  and  of  converting  it 
to  a  greater  number  of  profitable  purposes. 

Those  manufactures,  too,  unite  in  a  greater  degree 
than  almost  any  others  the  several  requisites  which 
have  been  mentioned  as  proper  to  be  consulted  in  the 
selection  of  objects. 

The  only  farther  encouragement  of  manufactories  of 
this  article,  the  propriety  of  which  may  be  considered 
as  unquestionable,  seems  to  be  an  increase  of  the  duties 
on  foreign  rival  commodities. 

Steel  is  a  branch  which  has  already  made  a  consider- 
able progress,  and  it  is  ascertained  that  some  new  en- 
terprises on  a  more  extensive  scale  have  been  lately  set 
on  foot.  The  facility  of  carrying  it  to  an  extent  which 
will  supply  all  internal  demands,  and  furnish  a  con- 
siderable surplus  for  exportation,  cannot  be  doubted. 
The  duty  upon  the  importation  of  this  article,  which  is 
at  present  seventy-five  cents  per  cwt.,  may,  it  is  con- 
ceived, be  safely  and  advantageously  extended  to  one 
hundred  cents.  It  is  desirable,  by  decisive  arrange- 
ments, to  second  the  efforts  which  are  making  in  so 
very  valuable  a  branch. 

The  United  States  already  in  a  great  measure  sup- 
ply themselves  with  nails  and  spikes.  They  are  able, 
and  ought  certainly  to  do  it  entirely.  The  first  and 
most  laborious  operation  in  this  manufacture  is  per- 
formed by  water-mills ;  and  of  the  persons  afterwards 
employed,  a  great  proportion  are  boys,  whose  early  habits 
of  industry  are  of  importance  to   the  community,    to 


REPOBT  ON  MANUFACTURES.  81 

the  present  support  of  their  families,  and  to  their  own 
future  comfort.  It  is  not  less  curious  than  true  that, 
in  certain  parts  of  the  country,  the  making  of  nails  is 
an  occasional  family  manufacture. 

The  expediency  of  an  additional  duty  on  these  arti- 
cles is  indicated  by  an  important  fact.  About  1,800,000 
pounds  of  them  were  imported  into  the  United  States 
in  the  course  of  a  year,  ending  the  30th  of  September, 
1790.  A  duty  of  two  cents  per  pound  would,  it  is  pre- 
sumable, speedily  put  an  end  to  so  considerable  an  im- 
portation. And  it  is  in  every  view  proper  that  an  end 
should  be  put  to  it. 

The  manufacture  of  these  articles,  like  that  of  some 
others,  suffers  from  the  carelessness  and  dishonesty  of 
a  part  of  those  who  carry  it  on.  An  inspection,  in  cer- 
tain cases,  might  tend  to  correct  the  evil.  It  will  de- 
serve consideration  whether  a  regulation  of  this  sort 
cannot  be  applied  without  inconvenience  to  the  expor- 
tation of  the  articles  either  to  foreign  countries  or  from 
one  State  to  another. 

The  implements  of  husbandry  are  made  in  several 
States  in  great  abundance.  In  many  places  it  is  done 
by  the  common  blacksmiths.  And  there  is  no  doubt 
that  an  ample  supply  for  the  whole  country  can  with 
great  ease  be  procured  among  ourselves. 

Various  kinds  of  edged  tools,  for  the  use  of  mechan- 
ics, are  also  made  ;  and  a  considerable  quantity  of  hol- 
low wares,  —  though  the  business  of  castings  has  not 
yet  attained  the  perfection  which  might  be  wished. 
It  is,  however,  improving,  and  as  there  are  respectable 
capitals  in  good  hands  embarked  in  the  prosecution  of 
tliose  branches  of  iron  manufactories,  which  are  yet  in 
their  infancy,  they  may  all  be  contemplated  as  objects 
not  difficult  to  be  acquired. 

To  insure  the  end  it  seems  equally  safe  and  prudent 
to  extend  the  duty  ad  valorem  upon  all  manufactures 


82  ALEXANDER  UAMILTON. 

of  iron,  or  of  which  iron  is  the  article  of  chief  value, 
to  10%. 

Fire-arms,  and  other  military  weapons,  may,  it  is 
conceived,  be  placed  without  inconvenience  in  the  class 
of  articles  rated  at  15*^.  There  exist  already  manu- 
factories of  these  articles,  which  only  require  the  stim- 
ulus of  a  certain  demand  to  render  them  adequate  to 
the  supply  of  the  United  States. 

It  would  also  be  a  material  aid  to  manufactures  of 
this  nature,  as  well  as  a  mean  of  public  security,  if 
provision  should  be  made  for  an  annual  purchase  of 
military  weapons  of  home  manufacture,  to  a  certain 
determinate  extent,  in  order  to  the  formation  of  ar- 
senals, and  to  replace  from  time  to  time  such  as  should 
be  withdrawn  for  use,  so  as  always  to  have  in  store 
the  quantity  of  each  kind  which  should  be  deemed  a 
competent  supply. 

But  it  may  hereafter  deserve  legislative  considera- 
tion, whether  manufactories  of  all  the  necessary  weapons 
of  war  ought  not  to  be  established  on  account  of  gov- 
ernment itself.  Such  establishments  are  agreeable  to 
the  usual  practice  of  nations,  and  that  practice  seems 
founded  on  sufficient  reason. 

There  appears  to  be  an  improvidence  in  leaving  these 
essential  instruments  of  national  defense  to  the  casual 
speculations  of  individual  adventure,  —  a  resource  which 
can  less  be  relied  upon  in  this  case  than  in  most  others, 
—  the  articles  in  question  not  being  objects  of  ordinary 
and  indispensable  private  consumption  or  use.  As  a 
general  rule,  manufactories  on  the  immediate  account 
of  government  are  to  be  avoided  ;  but  this  seems  to  l)e 
one  of  the  few  exceptions  which  that  rule  admits,  de- 
pending on  very  special  reasons. 

Manufactures  of  steel  generally,  or  of  which  steel  is 
the  article  of  chief  value,  may  with  advantage  be 
placed  in  the  class  of  goods  rated  at  7|%.     As  manu- 


REPORT  ON  MANUFACTURES.  83 

factures  of  this  kind  have  not  yet  made  any  consider- 
able progress,  it  is  a  reason  for  not  rating  them  as  high 
as  those  of  iron  ;  biit  as  this  material  is  the  basis  of 
them,  and  as  their  extension  is  not  less  practicable 
than  important,  it  is  desirable  to  promote  it  by  a  some- 
what higher  duty  than  the  present. 

A  question  arises  how  far  it  might  be  expedient  to 
permit  the  importation  of  iron  in  pigs  and  bars  free 
from  duty.  It  would  certainly  be  favorable  to  manu- 
facturers of  the  article,  but  the  doubt  is  whether  it 
might  not  interfere  with  its  })roduction. 

Two  circumstances,  however,  abate,  if  they  do  not 
remove,  apprehension  on  this  score.  One  is  the  con- 
siderable increase  of  price,  which  has  already  been  re- 
marked, and  which  renders  it  probable  that  the  free 
admission  of  foreign  iron  would  not  be  inconsistent 
with  an  adequate  profit  to  the  proprietors  of  iron 
works  ;  the  other  is  the  augmentation  of  demand  which 
woidd  be  likely  to  attend  the  increase  of  manufactures 
of  the  article  in  consequence  of  the  additional  encour- 
agements proposed  to  be  given.  But  caution,  never- 
theless, in  a  matter  of  this  kind  is  most  advisable. 
The  measure  suggested  ought,  perhaps,  rather  to  be 
contemplated,  subject  to  the  lights  of  further  expe- 
rience, than  immediately  adopted. 

COPPER. 

The  manufactures  of  which  this  article  is  suscepti- 
ble are  also  of  great  extent  and  utility.  Under  this 
(leseription,  those  of  brass,  of  which  it  is  the  principal 
ingredient,  are  intended  to  be  included. 

The  material  is  a  natural  production  of  the  country. 
IMines  of  copper  have  actually  been  wrought,  and  with 
profit  to  the  undertakers,  tliough  it  is  not  known  that 
any  are  now  in  this  condition.  And  nothing  is  easier 
than  the  introduction  of  it  from  other  countries  on 
moderate  terms  and  in  great  plenty. 


84  ALEX xiN DEB  HAMILTON. 

Coppersmiths  and  brassfounders,  particularly  the 
former,  are  numerous  in  the  United  States,  —  some  of 
Avhom  carry  on  business  to  a  respectable  extent. 

To  multiply  and  extend  manufactories  of  the  mate- 
rials in  question  is  worthy  of  attention  and  effort.  In 
order  to  this  it  is  desirable  to  facilitate  a  plentiful  sup- 
ply of  the  materials.  And  a  proper  mean  to  this  end 
is  to  place  them  in  the  class  of  free  articles.  Copper 
in  plates  and  brass  are  already  in  this  predicament, 
but  copper  in  pigs  and  bars  is  not;  neither  is  lapis 
calaminaris,  which,  together  with  copper  and  charcoal, 
constitute  the  component  ingredients  of  brass.  The 
exemption  from  duty  by  parity  of  reason  ought  to  em- 
brace all  such  of  these  articles  as  are  objects  of  impor- 
tation. 

An  additional  duty  on  brass  wares  will  tend  to  the 
general  end  in  view.  These  now  stand  at  5%,  while 
those  of  tin,  pewter  and  copper  are  rated  at  7|%. 
There  appears  to  be  a  propriety,  in  every  view,  in 
placing  brass  wares  upon  the  same  level  with  tliem ; 
and  it  merits  consideration  whether  the  duty  upon  all 
of  them  ought  not  to  be  raised  to  10%. 

LEAD. 

There  are  numerous  proofs  that  this  material  abounds 
in  the  United  States,  and  requires  little  to  unfold  it  to 
an  extent  more  than  equal  to  every  domestic  occasion. 
A  prolific  mine  of  it  has  long  been  open  in  the  south- 
western parts  of  Virginia,  and  under  a  public  admin- 
istration, during  the  late  war,  yielded  a  considerable 
supply  for  military  use.  This  is  now  in  the  hands  of 
individuals,  Avho  not  only  carry  it.  on  with  spirit,  but 
have  established  manufactories  of  it  at  Richmond,  in 
the  same  State. 

The  duties  already  laid  upon  the  importation  of  this 
article,  either  in  its  unmanufactured  or  manufactured 


EEPOET  ON  MANUFACTURES.  85 

state,  insure  it  a  decisive  advantage  in  the  home  market 
—  which  amounts  to  considerable  encouragement.  If 
the  duty  on  pewter  wares  should  be  raised,  it  would 
aiford  a  further  encouragement.  Nothing  else  occurs 
as  proper  to  be  added. 

FOSSIL    COAL. 

This,  as  an  important  instrument  of  manufactures, 
may  without  impropriety  be  mentioned  among  the  sub- 
jects of  this  report. 

A  copious  supply  of  it  would  be  of  great  consequence 
to  the  iron  branch.  As  an  article  of  household  fuel, 
also,  it  is  an  interesting  production,  the  utility  of  which 
must  increase  in  proportion  to  the  decrease  of  wood, 
by  the  progress  of  settlement  and  cultivation.  And  its 
importance  to  navigation,  as  an  immense  article  of  trans- 
portation coastwise,  is  signally  exemplified  in  Great 
Britain. 

It  is  known  that  there  are  several  coal  mines  in  Vir- 
ginia, now  worked ;  and  appearances  of  their  existence 
are  familiar  in  a  number  of  })laces. 

The  expediency  of  a  bounty  on  all  this  species  of  coal 
of  home  production,  and  of  premiums  on  the  opening 
of  new  mines,  under  certain  qualifications,  appears  to 
be  worthy  of  particular  examination.  The  great  impor- 
tance of  the  article  will  amply  justify  a  reasonable  ex- 
pense in  this  way,  if  it  shall  appear  to  be  necessary  to 
and  shall  be  thought  likely  to  answer  the  end. 

WOOD. 

Several  manufacturers  of  this  article  flourish  iu  the 
United  States.  Ships  are  nowhere  built  in  greater  per- 
fection, and  cabinet  wares  generally  are  made  little, 
if  at  all,  inferior  to  those  of  Europe.  Their  extent  is 
such  as  to  have  admitted  of  considerable  exportation. 

All  exemption  from  dut}'  of  the  several  kinds  of  wood 


86  ALEXANDER  HAMILTON. 

ordinarily  used  in  these  manu.factures  seems  to  be  all 
that  is  requisite  by  way  of  encouragement.  It  is  rec- 
ommended by  the  consideration  of  a  similar  policy 
being  pursued  in  other  countries,  and  by  the  expedi- 
ency of  giving  equal  advantages  to  our  own  workmen 
in  wood.  The  abundance  of  timber  proper  for  ship- 
building in  the  United  States  does  not  appear  to  be  any 
objection  to  it.  The  increasing  scarcity  and  growing 
importance  of  that  article  in  the  European  countries 
admonish  the  United  States  to  commence  and  systemat- 
ically to  pursue  measures  for  the  preservation  of  their 
stock.  Whatever  may  promote  the  regular  establish- 
ment of  magazines  of  ship  timber  is  in  various  views 
desirable. 

SKINS. 

There  are  scarcely  any  manufactories  of  greater  impor- 
tance than  of  this  article.  Their  direct  and  very  happy 
influence  upon  agriculture,  by  promoting  the  raising  of 
cattle  of  different  kinds,  is  a  very  material  recommen- 
dation. 

It  is  pleasing,  too,  to  observe  the  extensive  progress 
they  have  made  in  their  principal  branches,  which  are 
so  far  matured  as  almost  to  defy  foreign  competition. 
Tanneries,  in  particular,  are  not  only  carried  on  as  a 
regular  business  in  numerous  instances,  and  in  various 
parts  of  the  country,  but  they  constitute,  in  some 
places,  a  valuable  item  of  incidental  family  manufac- 
tures. 

Representations,  however,  have  been  made,  importing 
the  expediency  of  further  encouragement  to  the  leather 
branch  in  two  ways  :  one,  by  increasing  the  duty  on  the 
manufactures  of  it,  which  are  imported  ;  the  other,  by 
prohibiting  the  exportation  of  bark.  In  support  of  the 
latter  it  is  alleged  that  the  price  of  bark,  chiefly  in  con- 
sequence of  large  exportations,  has  risen  within  a  few 
years  from  about  three  dollars  to  four  and  an  half  per 
cord. 


REPORT  ON  MANUFACTURES.  87 

These  suggestions  are  submitted  rather  as  intima- 
tions which  merit  considerations,  than  as  matters  the 
propriety  of  which  is  manifest.  It  is  not  clear  that  an 
increase  of  duty  is  necessary  ;  and  in  regard  to  the  pro- 
hibition desired,  there  is  no  evidence  of  any  considera- 
ble exportation  hitherto ;  and  it  is  most  probable  that 
whatever  augmentation  of  price  may  have  taken  place 
is  to  be  attributed  to  an  extension  of  the  home  demand 
from  the  increase  of  manufactures,  and  to  a  decrease  of 
the  supply,  in  consequence  of  the  progress  of  settle- 
ment, rather  than  to  the  quantities  which  have  been  ex- 
ported. 

It  is  mentioned,  however,  as  an  additional  reason  for 
the  prohibition,  that  one  species  of  the  bark  usually  ex- 
ported is  in  some  sort  peculiar  to  the  country ;  and  the 
material  of  a  very  valuable  dye,  of  great  use  in  some 
other  manufactures  in  which  the  United  States  have 
begun  a  competition. 

There  niay  also  be  this  argument  in  favor  of  an  in- 
crease of  duty.  The  object  is  of  importance  enough  to 
claim  decisive  encouragement ;  and  the  progress  which 
has  been  made  leaves  no  room  to  apprehend  any  incon- 
venience on  the  score  of  supply  from  such  an  increase. 

It  would  be  of  benefit  to  this  branch,  if  glue,  which 
is  now  rated  at  5%,  were  made  the  object  of  an  ex- 
cluding duty.  It  is  already  made  in  large  quantities 
at  various  tanneries  ;  and,  like  paper,  is  an  entire  econ- 
omy of  materials,  which,  if  not  manufactured,  would  be 
left  to  perish.  It  may  be  placed  with  advantage  in  the 
class  of  articles  paying  15%. 

GRAIN. 

Manufactures  of  the  several  species  of  this  article 
have  a  title  to  peculiar  favor  ;  not  only  because  they  are 
mest  of  them  immediately  connected  with  the  subsist- 
ence of  the  citizens,  but  because  they  enlarge  the  demand 
for  the  most  precio'^is  products  of  tlie  soil. 


88  ALEXANDER  HAMILTON. 

Though  flour  may  with  propriety  be  noticed  as  a 
manufacture  of  grain,  it  were  useless  to  do  it,  but  for 
the  purpose  of  submitting  the  expediency  of  a  general 
system  of  inspection  throughout  the  ports  of  the  United 
States  ;  which,  if  establislied  upon  proper  principles, 
would  be  likely  to  improve  the  quality  of  our  flour 
everywhere,  and  to  raise  its  reputation  in  foreign  mar- 
kets. There  are,  however,  considerations  which  stand 
in  the  way  of  such  an  arrangement. 

Ardent  spirits  and  malt  liquors  are,  next  to  flour,  the 
two  principal  manufactures  of  grain.  The  first  has 
made  a  very  extensive,  the  last  a  considerable  progress 
in  the  United  States.  In  respect  to  both,  an  exclusive 
possession  of  the  home  market  ought  to  be  secured  to 
the  domestic  manufacturers,  as  fast  as  circumstances 
will  admit.  Nothing  is  more  practicable,  and  nothing 
more  desirable. 

The  existing  laws  of  the  United  States  have  done 
much  towards  attaining  this  valuable  object ;  but  some 
additions  to  the  present  duties  on  foreign  ■  distilled 
spirits  and  foreign  malt  liquors,  and  perhaps  an  abate- 
ment of  tliose  on  home-made  spirits,  would  more  effect- 
ually secure  it;  and  there  does  not  occur  any  very 
weighty  objection  to  either. 

An  augmentation  of  the  duties  on  imported  spirits 
would  favor  as  well  the  distillation  of  spirits  from  mo- 
lasses as  that  from  grain.  And  to  seciire  to  the  nation 
the  benefit  of  a  manufacture,  even  of  foreign  materials, 
is  always  of  great,  though  perhaps  of  secondary  im- 
portance. 

A  strong  impression  prevails  in  the  minds  of  those 
concerned  in  distilleries  (including,  too,  the  most  candid 
and  enlightened)  that  greater  differences  in  the  rates  of 
duty  on  foreign  and  domestic  spirits  are  necessary  com- 
pletely to  secure  the  successful  manufacture  of  the 
latter,  and  there  are  facts  which  entitle  this  impression 
to  attention. 


REPORT  ON  MANUFACTURES.  89 

It  is  known  that  the  price  of  molasses,  for  some  years 
past,  has  been  successively  rising  in  the  West  India 
markets,  owing  partly  to  a  competition  which  did  not 
formerly  exist,  and  partly  to  an  extension  of  demand  in 
this  country ;  and  it  is  evident  that  the  late  disturbances 
in  those  islands  from  which  we  draw  our  principal  sup- 
ply must  so  far  interfere  with  the  production  of  the 
article  as  to  occasion  a  material  enhancement  of  price. 
The  destruction  and  devastation  attendant  on  the  insur- 
rection in  Hispaniola,  in  particular,  must  not  only  con- 
tribute very  much  to  that  effect,  but  may  be  expected 
to  give  it  some  duration.  These  circumstances  and  the 
duty  of  three  cents  per  gallon  on  molasses  may  render  it 
difiicult  for  the  distillers  of  that  material  to  maintain, 
with  adequate  profit,  a  competition  with  the  rum 
brought  from  the  West  Indies,  the  quality  of  which  is 
so  considerably  superior. 

The  consumption  of  Geneva,  or  gin,  in  this  country, 
is  extensive.  It  is  not  long  since  distilleries  of  it  have 
grown  up  among  us  to  any  importance.  They  are  now 
becoming  of  consequence,  but  being  still  in  their  in- 
fancy, they  require  protection. 

It  is  represented  that  the  price  of  some  of  the  mate- 
rials is  greater  here  than  in  Holland,  from  which  place 
large  quantities  are  brought ;  the  price  of  labor  con- 
siderably greater ;  the  capitals  engaged  in  the  busi- 
ness there  much  larger  than  those  which  are  employed 
here ;  the  rate  of  profits  at  which  the  undertakers  can 
afford  to  carry  it  on  much  less  ;  the  prejudices  in  favor 
of  imported  gin,  strong.  These  circumstances  are  al- 
leged to  outweigh  the  charges  which  attend  the  bring- 
ing of  the  article  from  Europe  to  the  United  States, 
and  the  present  difference  of  duty,  so  as  to  obstruct  the 
prosecution  of  the  manufacture  with  due  advantage. 

Experiment  could,  i)erhaps,  alone  decide  with  cer- 
tainty the  justness  of  the  suggestions  which  are  made ; 


90  ALEXANDER  HAMILTON. 

but  in  relation  to  branches  of  manufacture  so  impor- 
tant, it  would  seem  inexpedient  to  hazard  an  unfavora- 
ble issue,  and  better  to  err  on  the  side  of  too  great  than 
of  too  small  a  difference  in  the  particular  in  question. 

It  is  therefore  submitted,  that  an  addition  of  two 
cents  per  gallon  be  made  to  the  duty  on  im})orted  spir- 
its of  the  first  class  of  proof,  with  a  proportionable  in- 
crease on  those  of  higher  proof ;  and  that  a  deduction 
of  one  cent  per  gallon  be  made  from  the  duty  on  spirits 
distilled  within  the  United  States,  beginning  with  the 
first  class  of  proof,  and  a  proportionable  deduction  from 
the  duty  on  those  of  Jiigher  proof. 

It  is  ascertained,  that  by  far  the  greatest  part  of  the 
malt  liquors  consumed  in  the  United  States  is  the 
produce  of  domestic  breweries.  It  is  desirable,  and  in 
all  likelihood  attainable,  that  the  whole  consumption 
should  be  supplied  by  ourselves. 

The  malt  liquors  made  at  home,  though  inferior  to 
the  best,  are  equal  to  a  great  part  of  those  which  have 
been  usually  imported.  The  progress  already  made  is 
an  earnest  of  what  may  be  accomplished.  The  growing 
competition  is  an  assurance  of  improvement.  This  will 
be  accelerated  by  measures  tending  to  invite  a  greater 
capital  into  tliis  channel  of  employment. 

To  render  the  encouragement  of  domestic  breweries 
decisive,  it  may  be  advisable  to  substitute  to  the  present 
rates  of  duty  eight  cents  per  gallon  generally ;  and  it 
will  deserve  to  be  considered  as  a  guard  against  inva- 
sions, whether  there  ought  not  to  be  a  prohibition  of 
their  importation  except  in  casks  of  considerable  capa- 
city. It  is  to  be  hoped  that  such  a  duty  would  banish 
from  the  market  foreign  malt  liquors  of  inferior  quality ; 
and  that  tlie  best  kind  only  would  continue  to  be  im- 
ported, till  it  should  be  supplanted  by  the  efforts  of 
equal  skill  or  care  at  home. 

Till  that  period  the  importation  so  qualified  would  be 


REPORT  ON  MANUFACTURES.  91 

an  useful  stimulus  to  improvement ;  and  in  the  mean 
time  the  payment  of  the  increased  price  for  the  enjoy- 
ment of  a  luxury,  in  order  to  the  encouragement  of  a 
most  useful  branch  of  domestic  industry,  could  not  rea- 
sonably be  deemed  a  hardship. 

As  a  further  aid  to  manufactures  of  grain,  though 
upon  a  smaller  scale,  the  articles  of  starch,  hair-powder 
and  wafers  may  with  great  propriety  be  placed  among 
those  which  are  rated  at  fifteen  per  cent.  No  manxifac- 
tures  are  more  simple  nor  more  completely  within  the 
reach  of  a  full  supply  from  domestic  sources ;  and  it  is 
a  policy,  as  common  as  it  is  obvious,  to  make  them  the 
objects  either  of  prohibitory  duties  or  of  express  pro- 
hibition. 

FLAX    AND    HEMP. 

Manufactures  of  these  articles  have  so  much  affinity 
to  each  other,  and  they  are  so  often  blended,  that  they 
may  with  advantage  be  considered  in  conjunction.  The 
importance  of  the  linen  branch  to  agriculture  ;  its  pre- 
cious effects  upon  household  industry  ;  the  ease  with 
which  the  materials  can  be  produced  at  home  to  any 
requisite  extent ;  the  great  advances  which  have  been 
already  made  in  the  coarser  fabrics  of  them,  especially 
in  the  family  way,  —  constitute  claims  of  peculiar  force 
to  the  patronage  of  government. 

This  patronage  may  be  afforded  in  various  ways :  by 
]  )romoting  the  growth  of  the  materials  ;  by  increasing 
tlie  impediments  to  an  advantageous  competition  of 
rival  foreign  artich^s  ;  by  direct  bounties  or  ]iremiums 
upon  the  home  manufacture. 

First.     As  to  promoting  the  growth  of  the  materials. 

In  respect  to  lieni]),  something  has  been  already  done 
by  the  high  duty  upon  foreign  hemp.  If  the  facilities 
for  domestic  ])roducti()n  were  not  unusually  great,  the 
policy  of  the  duty  on  the  foreign  raw  material  would  b" 
liighly  (piestionable,  as  interfering  with  the  growth  o\ 


92  ALEXANDER  HAMILTON. 

manufactures  of  it.  But  making  the  proper  allowance 
for  those  facilities,  and  with  an  eye  to  the  future  and 
natural  progress  of  the  country,  the  measure  does  not 
appear  upon  the  whole  exceptionable. 

•  A  strong  wish  naturally  suggests  itself,  that  some 
method  could  be  devised  of  affording  a  more  direct  en- 
couragement to  the  growth  both  of  flax  and  hemp ;  such 
as  would  be  effectual  and  at  the  same  time  not  attended 
with  too  great  inconveniences.  To  this  end,  bounties 
and  premiums  offer  themselves  to  consideration ;  but  no 
modification  of  them  has  yet  occurred  which  would  not 
either  hazard  too  much  expense,  or  operate  unequally 
in  reference  to  the  circumstances  of  different  parts  of 
the  Union,  and  which  would  not  be  attended  with  very 
great  difficulties  in  the  execution. 

Secondly.  As  to  increasing  the  impediments  to  an 
advantageous  competition  of  rival  foreign  articles. 

To  this  purpose,  an  augmentation  of  the  duties  on 
importation  is  the  obvious  expedient ;  which,  in  regard 
to  certain  articles,  appears  to  be  recommended  by  suffi- 
cient reasons. 

The  principal  of  these  articles  is  sail-cloth  ;  one  inti- 
mately connected  with  navigation  and  defense  ;  and  of 
which  a  flourishing  manufactory  is  established  at  Bos- 
ton, and  very  promising  ones  at  several  other  places. 

It  is  presumed  to  be  both  safe  and  advisable  to  place 
this  in  the  class  of  articles  rated  at  ten  per  cent.  A 
strong  reason  for  it  results  from  the  consideration  that 
a  bounty  of  two  pence  sterling  per  ell  is  allowed  in 
Great  Britain  upon  the  exportation  of  the  sail-cloth 
manufactured  in  that  kingdom. 

It  would  likewise  appear  to  be  good  policy  to  raise 
the  duty  to  7l-%  on  the  following  articles:  drillings, 
osnaburgh,  ticklenburghs,  dowlas,  canvas,  brown  rolls, 
bagging,  and  upon  all  other  linens  the  first  cost  of  which 
at  the  place  of  exportation  does  not  exceed  35  cents  per 


REPORT  ON  MANUFACTURES.  93 

yard.  Aboimty  of  12|^%  upon  an  average,  on  the  expor- 
tation of  siich  or  similar  linens  from  Great  Britain,  en- 
courages the  manufacture  of  them  in  that  country,  and 
increases  the  obstacles  to  a  successful  competition  in 
the  countries  to  which  they  are  sent. 

The  quantities  of  tow  and  other  household  linens 
manufactured  in  different  parts  of  the  United  States, 
and  the  expectations  which  are  derived  from  some  late 
experiments,  of  being  able  to  extend  the  use  of  labor- 
saving  machines  in  the  coa-rser  fabrics  of  linen,  obviate 
the  danger  of  inconvenience  from  an  increase  of  the  duty 
upon  such  articles,  and  authorize  a  hope  of  speedy  and 
complete  success  to  the  endeavors  which  may  be  used 
for  procuring  an  internal  supply. 

Thirdly.  As  to  direct  bounties  or  permiums  upon  the 
manufactured  articles. 

To  afford  more  effectual  encouragement  to  the  manu- 
facture, and  at  the  same  time  to  promote  the  cheapness 
of  the  article  for  the  benefit  of  navigation,  it  will  be  of 
great  use  to  allow  a  bounty  of  two  cents  per  yard  on  all 
sail-cloth  which  is  made  in  the  United  States  from  ma- 
terials of  their  own  growth.  This  would  also  assist 
the  culture  of  those  materials.  An  encouragement  of 
this  kind,  if  adopted,  ought  to  be  established  for  a  mod- 
erate term  of  years,  to  invite  to  new  undertakings,  and 
to  an  extension  of  the  old.  This  is  an  article  of  impor- 
tance enough  to  warrant  the  employment  of  extraordi- 
nary means  in  its  favor. 

COTTON. 

There  is  something  in  the  texture  of  this  material 
which  adapts  it  in  a  peculiar  degree  to  the  application 
of  machines.  The  signal  utility  of  the  mill  for  spin- 
ning of  cotton,  not  long  since  invented  in  England,  has 
been  noticed  in  another  place  ;  but  there  are  other  ma- 
chines scarcely  inferior  in  utility,  which,  in  the  differ- 


94  ALEXANDER  HAMILTON. 

ent  manufactories  of  this  article,  are  employed  either  ex- 
clusively or  with  more  than  ordinary  effect.  This  very 
important  circumstance  recommends  the  fabrics  of  cot- 
ton in  a  more  particular  manner  to  a  country  in  which 
a  defect  of  hands  constitutes  the  greatest  obstacle  to 
success. 

The  variety  and  extent  of  the  uses  to  which  the  manu- 
factures of  this  article  are  applicable  is  another  power- 
ful argument  in  their  favor. 

And  the  faculty  of  the  United  States  to  produce  the 
raw  material  in  abundance  and  of  a  quality  which,  though 
alleged  to  be  inferior  to  some  that  is  produced  in  other 
quarters,  is  nevertheless  capable  of  being  used  with 
advantage  in  many  fabrics,  and  is  probably  susceptible 
of  being  carried  by  a  more  experienced  culture  to  much 
greater  perfection,  suggests  an  additional  and  a  very 
cogent  indvicement  to  the  vigorous  pursuit  of  the  cotton 
branch  in  its  several  subdivisions. 

How  nuich  has  been  already  done  has  been  stated  in 
a  preceding  part  of  this  report. 

In  addition  to  this,  it  may  be  annoimced  that  a  soci- 
ety is  forming  with  a  capital  which  is  expected  to  be 
extended  to  at  least  half  a  million  of  dollars,  on  behalf 
of  which  measures  are  already  in  train  for  prosecuting, 
on  a  large  scale,  the  making  and  printing  of  cotton 
goods. 

These  circumstances  conspire  to  indicate  the  expedi- 
ency of  removing  any  obstructions  which  may  happen 
to  exist  to  the  advantageous  prosecution  of  the  manu- 
factories in  question,  and  of  adding  such  encourage- 
ments as  may  appear  necessary  and  proper. 

The  present  duty  of  three  cents  per  pound  on  the 
foreign  raw  material  is  undoubtedly  a  very  serious  im- 
pediment to  the  progress  of  those  manufactories. 

The  injurious  tendency  of  similar  duties,  either  prior 
to  the  establishment  or  in  the  infancy  of  the  domestic 


REPORT  ON  MANUFACTURES.  95 

manufacture  of  the  article,  as  it  regards  the  manufac- 
ture, and  their  worse  than  inutility  in  relation  to  the 
home  production  of  the  material  itself  have  been  antici- 
pated, particularly  in  discussing  the  subject  of  pecuniary 
bounties. 

Cotton  has  not  the  same  pretensions  with  hemp  to 
form  an  exception  to  the  general  rule. 

Kot  being,  like  hemp,  an  universal  production  of  the 
country,  it  affords  less  assurance  of  an  adequate  inter- 
nal supply ;  but  the  chief  objection  arises  from  the 
doubts  which  are  entertained  concerning  the  quality  of 
the  national  cotton.  It  is  alleged  that  the  fibre  of  it  is 
considerably  shorter  and  weaker  than  that  of  some  other 
places  ;  and  it  has  been  observed,  as  a  general  rule,  that 
the  nearer  the  place  of  growth  to  the  equator,  the  better 
the  quality  of  the  cotton.  That  which  comes  from 
Cayenne,  Surinam,  and  Demarara  is  said  to  be  prefera- 
ble, even  at  a  material  difference  of  price,  to  the  cotton 
of  the  islands. 

While  a  hope  may  reasonably  be  indulged  that,  with 
due  care  and  attention,  the  national  cotton  may  be 
made  to  approach  nearer  than  it  now  does  to  that  of 
regions  somewhat  more  favored  by  climate  ;  and  while 
facts  authorize  an  opinion  that  very  great  use  may  be 
made  of  it,  and  that  it  is  a  resource  which  gives  greater 
security  to  the  cotton  fabrics  of  this  country  than  can 
be  enjoyed  by  any  which  depends  wholly  on  external 
supply,  it  will  certainly  be  wise  in  every  view  to  let  our 
infant  manufactures  have  the  full  benefit  of  the  best 
materials  on  the  cheapest  terms.  It  is  obvious  that  the 
necessity  of  having  such  materials  is  proportioned  to 
the  unskillfulness  and  inexperience  of  the  workmen  em- 
ployed, who,  if  inexpert,  will  not  fail  to  commit  great 
waste  where  the  materials  they  are  to  work  with  are  of 
an  indifferent  kind. 

To  secure  to  the  national  manufacturers  so  essential 


96  ALEXANDER  HAMILTON. 

an  advantage,  a  repeal  of  the  present  duty  on  imported 
cotton  is  indispensable. 

A  substitute  for  tliis,  far  more  encouraging  to  domes- 
tic production,  will  be  to  grant  a  bounty  on  the  na- 
tional cotton  when  wrought  at  a  home  manufactory,  to 
which  a  bounty  on  the  exportation  of  it  may  be  added. 
Either,  or  both,  would  do  much  more  towards  promot- 
ing the  growth  of  the  article  than  the  merely  nominal 
encouragement  which  it  is  proposed  to  abolish.  The 
first  would  also  have  a  direct  influence  in  encouraging 
the  manufacture. 

The  bounty  which  has  been  mentioned  as  existing  in 
Great  Britain  upon  the  exportation  of  coarse  linens  not 
exceeding  a  certain  value  applies  also  to  certain  descrip- 
tions of  cotton  goods  of  similar  value. 

This  furnishes  an  additional  argument  for  allowing 
to  the  national  manufacturers  the  species  of  encourage- 
ment just  suggested,  and  indeed  for  adding  some  other 
aid. 

One  cent  per  yard,  not  less  than  of  a  given  width, 
on  all  goods  of  cotton,  or  of  cotton  and  linen  mixed, 
which  are  manufactured  in  the  United  States,  with  the 
addition  of  one  cent  per  pound  weight  of  the  material 
if  made  of  national  cotton,  would  amount  to  an  aid  of 
considerable  importance  both  to  the  production  and  to 
the  manufacture  of  that  valuable  article.  And  it  is  con- 
ceived that  the  expense  would  be  well  justified  by  the 
magnitude  of  the  object. 

The  printing  and  staining  of  cotton  goods  is  known 
to  be  a  distinct  business  from  the  fabrication  of  them. 
It  is  one  easily  accomplished,  and  which,  as  it  adds  ma- 
terially to  the  value  of  the  article  in  its  white  state, 
and  jDrepares  it  for  a  variety  of  new  uses,  is  of  impor- 
tance to  be  promoted. 

As  imported  cottons,  equally  with  those  which  are 
made  at  home,  may  be  the  objects  of  this  manufacture, 


REPORT  ON  MANUFACTURES.  97 

it  will  merit  consideration  whether  the  Avhole  or  a  part 
of  the  duty  on  the  white  goods  ought  not  to  be  allowed 
to  be  drawn  back  in  favor  of  those  who  print  or  stain 
them.  This  measure  would  certainly  operate  as  a  power- 
ful encouragement  to  the  business,  and  though  it  may 
in  a  degree  counteract  the  original  fabrication  of  the 
articles,  it  would  probably  more  than  compensate  for 
this  disadvantage  in  the  rapid  growth  of  a  collateral 
branch  which  is  of  a  nature  sooner  to  attain  to  matu- 
rity. When  a  sufficient  progress  shall  have  been  made, 
the  drawback  may  be  abrogated,  and  by  that  time  the 
domestic  supply  of  the  articles  to  be  printed  or  stained 
will  have  been  extended. 

If  the  duty  of  7  J  %  on  certain  kinds  of  cotton  goods 
were  extended  to  all  goods  of  cotton,  or  of  which  it  is 
the  principal  material,  it  would  probably  more  than 
counterbalance  the  effect  of  the  drawback  proposed  in 
relation  to  the  fabrication  of  the  article.  And  no  ma- 
terial objection  occurs  to  such  an  extension.  The  duty, 
then,  considering  all  the  circumstances  which  attend 
goods  of  this  description,  could  not  be  deemed  inconve- 
niently high,  and  it  may  be  inferred  from  various 
causes  that  the  prices  of  them  would  still  continue 
moderate. 

Manufactories  of  cotton  goods  not  long  since  estab- 
lished at  Beverly,  in  Massachusetts,  and  at  Providence, 
in  the  State  of  Rhode  Island,  and  conducted  with  a  per- 
severance corresponding  Avith  the  patriotic  motives 
which  began  them,  seem  to  have  overcome  the  first  ob- 
stacles to  success,  —  producing  corduroys,  velverets, 
fustians,  jeans,  and  other  similar  articles,  of  a  quality 
which  will  bear  a  comparison  with  the  like  articles 
brought  from  Manchester.  The  one  at  Providence  has 
the  merit  of  being  the  first  in  introducing  into  the 
United  States  the  celebrated  cotton  mill,  which  not  only 
furnishes  materials  for  that  manufactory  itself  but  for 


98  ALEXANDER  HAMILTON. 

the  supply  of  private  families  for  household  manufac- 
ture. 

Other  manufactories  of  the  same  material  as  regular 
businesses  have  also  been  begun  at  different  places  in 
the  State  of  Connecticut,  but  all  upon  a  smaller  scale 
than  those  above  mentioned.  Some  essays  are  also 
making  in  the  printing  and  staining  of  cotton  goods. 
There  are  several  small  establishments  of  this  kind 
already  on  foot. 

WOOL. 

In  a  country  the  climate  of  which  partakes  of  so  con- 
siderable a  proportion  of  winter  as  that  of  a  great  part 
of  the  United  States,  the  woollen  branch  cannot  be  re- 
garded as  inferior  to  any  which  relates  to  the  clothing 
of  the  inhabitants. 

Household  manufactures  of  this  material  are  carried 
on  in  different  parts  of  the  United  States  to  a  very 
interesting  extent,  but  there  is  only  one  branch  which 
as  a  regular  business  can  be  said  to  have  acquired  ma- 
turity.    This  is  the  making  of  hats. 

Hats  of  wool,  and  of  wool  mixed  with  fur,  are  made 
in  large  quantities  in  different  States,  and  nothing  seems 
wanting  but  an  adequate  supply  of  materials  to  render 
the  manufacture  commensurate  with  the  demand. 

A  promising  essay  towards  the  fabrication  of  cloths, 
cassimeres  and  other  woollen  goods,  is  likewise  going 
on  at  Hartford,  in  Connecticut.  Specimens  of  the  dif- 
ferent kinds  which  are  made,  in  the  possession  of  the 
secretary,  evince  that  these  fabrics  have  attained  a  very 
considerable  degree  of  perfection.  Their  quality  cer- 
tainly surpasses  anything  that  could  have  been  looked 
for  in  so  short  a  time  and  under  so  great  disadvan- 
tages, and  conspires  with  the  scantiness  of  the  means 
which  have  been  at  the  command  of  the  directors  to 
form  the  eulogium  of  that  public  spirit,  perseverance 
and  judgment  which  have  been  able  to  accomplish  -so 
much. 


REPORT  ON  MANUFACTURES.  99 

To  cherish  and  bring  to  maturity  this  precious  em- 
bryo must  engage  the  most  ardent  wishes,  and  propor- 
tionable regret  as  far  as  the  means  of  doing  it  may 
appear  difficult  or  uncertain. 

Measures  which  should  tend  to  promote  an  abundant 
supply  of  wool  of  good  quality  would  probably  afford 
the  most  efficacious  aid  that  present  circumstances  per- 
mit. 

To  encourage  the  raising  and  improving  the  breed  of 
sheep  at  home  would  certainly  be  the  most  desirable 
expedient  for  that  purpose ;  but  it  may  not  be  alone 
sufficient,  especially  as  it  is  yet  a  problem  whether  our 
wool  be  capable  of  such  a  degree  of  improvement  as  to 
render  it  fit  for  the  finer  fabrics. 

Premiums  would  probably  be  found  the  best  means  of 
promoting  the  domestic,  and  bounties  the  foreign  sup- 
ply. The  first  may  be  within  the  compass  of  the  in- 
stitution hereafter  to  be  siibmitted ;  the  last  would  re- 
quire a  specific  legislative  provision.  If  any  bounties 
are  granted,  they  ought  of  course  to  be  adjusted  with 
an  eye  to  quality  as  well  as  quantity. 

A  fund  for  this  purpose  may  be  derived  from  the 
addition  of  2^  %  to  the  present  rate  of  duty  on  carpets 
and  carpeting,  —  an  increase  to  which  the  nature  of 
the  articles  suggests  no  objection,  and  which  may  at 
the  same  time  furnish  a  motive  the  more  to  the  fabri- 
cation of  them  at  home,  towards  which  some  begin- 
nings have  been  made. 

SILK. 

The  production  of  this  article  is  attended  with  great 
facility  in  most  parts  of  the  United  States.  Some 
-  pleasing  essays  are  making  in  Connecticut  as  well  to- 
wards that  as  towards  the  manufacture  of  what  is  pro- 
duced. Stockings,  handkerchiefs,  ribbons  and  buttons 
are  made,  though  as  yet  but  in  small  quantities. 


100  ALEXANDER  HAMILTON. 

A  manufactory  of  lace,  upon  a  scale  not  very  exten- 
sive, has  been  long  memorable  at  Ipswich,  in  the  State 
of  Massachusetts. 

An  exemption  of  the  material  from  the  duty  which  it 
now  pays  on  importation,  and  premiums  upon  the  pro- 
duction to  be  dispensed  under  the  direction  of  the  in- 
stitution before  alluded  to,  see:n  to  be  the  only  species 
of  encouragement  advisable  at  so  early  a  stage  of  the 
thing. 

GLASS. 

The  materials  for  making  glass  are  found  everywhere. 
In  the  United  States  there  is  no  deficiency  of  them. 
The  sands  and  stones  called  tarso,  which  include  flinty 
and  crystalline  substances  generally,  and  the  salts  of 
various  plants,  particularly  of  the  sea-weed  kali,  or 
kelp,  constitute  the  essential  ingredients.  An  extraor- 
dinary abundance  of  fuel  is  a  particular  advantage  en- 
joyed by  this  country  for  such  manufactures.  They, 
however,  require  large  capitals,  and  involve  much  man- 
ual labor. 

Different  manufactories  of  glass  are  now  on  foot  in 
the  United  States.  The  present  duty  of  12^%  on  all 
imported  articles  of  glass  amounts  to  a  considerable  en- 
couragement to  those  manufactories.  If  anything  in 
addition  is  judged  eligible,  the  most  proper  would  ap- 
pear to  be  a  direct  bounty  on  window-glass  and  black 
bottles. 

The  first  recommends  itself  as  an  object  of  general 
convenience  ;  the  last  adds  to  that  character  the  circum- 
stance of  being  an  iin]^)ortant  item  in  breweries.  A  com- 
plaint is  made  of  great  deficiency  in  this  respect. 

GUNPOWDER. 

ISTo  small  progress  has  been  of  late  made  in  the  man- 
ufacture of  this  very  important  article.  It  may,  in- 
deed, be  considered  as  already  established,  but  its  high 
importance  renders  its  further  extension  very  desirable. 


REPORT  ON  MANUFACTURES.  101 

The  encouragements  which  it  already  enjoys  are  a 
duty  of  10%  on  the  foreign  rival  article,  and  an  ex- 
emption of  saltpetre,  one  of  the  principal  ingredients  of 
which  it  is  composed,  from  duty.  A  like  exemption  of 
sulphur,  another  chief  ingredient,  would  appear  to  be 
equally  proper.  No  quantity  of  this  article  has  yet 
been  produced  from  internal  sources.  The  use  made  of 
it  in  finishing  the  bottoms  of  ships  is  an  additional  in- 
ducement to  placing  it  in  the  class  of  free  goods.  Reg- 
ulations for  the  careful  inspection  of  the  article  would 
have  a  favorable  tendency. 

PAPER. 

Manufactories  of  paper  are  among  those  which  are 
arrived  at  the  greatest  maturity  in  the  United  States, 
and  are  most  adequate  to  national  supply.  That  of 
paper-hangings  is  a  branch  in  which  respectable  pro- 
gress has  been  made. 

Nothing  material  seems  wanting  to  the  further  suc- 
cess of  this  valuable  branch,  which  is  already  protected 
by  a  competent  duty  on  similar  imported  articles. 

In  the  enumeration  of  the  several  kinds  made  sub- 
ject to  that  duty,  sheathing  and  cartridge  paper  have 
been  omitted.  These  being  the  most  simple  manufac- 
tures of  the  sort,  and  necessary  to  military  supply,  as 
well  as  shi}>building,  recommend  themselves  equally 
with  those  of  other  descriptions  to  encouragement,  and 
appear  to  be  as  fully  within  the  compass  of  domestic 
exertions. 

PRINTED    BOOKS. 

The  great  number  of  presses  disseminated  throughout 
the  Union  seem  to  afford  an  assurance  that  there  is  no 
need  of  being  indebted  to  foreign  countries  for  the 
printing  of  the  books  which  are  used  in  the  United 
States.  A  duty  of  10%  instead  of  5%,  which  is  now 
charged  upon  the  article,  would  have  a  tendency  to  aid 
the  business  internally. 


102  ALEXANDER  HAMILTON. 

It  occurs,  as  an  objection  to  this,  that  it  may  have 
an  unfavorable  aspect  towards  literature  by  raising  the 
prices  of  books  in  universal  use  in  private  families, 
schools,  and  other  seminaries  of  learning.  But  the 
difference,  it  is  conceived,  would  be  without  effect. 

As  to  books  which  usually  fill  the  libraries  of  the 
wealthier  classes,  and  of  professional  men,  such  an  aug- 
mentation of  prices  as  might  be  occasioned  by  an  ad- 
ditional duty  of  5%  would  be  too  little  felt  to  be  an 
impediment  to  the  acquisition. 

And  with  regard  to  books  which  may  be  specially 
imported  for  the  use  of  particular  seminaries  of  learn- 
ing, and  of  pviblic  libraries,  a  total  exemption  from  duty 
would  be  advisable,  which  would  go  towards  obviating 
the  ol)jection  just  mentioned.  They  are  now  subject 
to  a  duty  of  5%. 

As  to  the  books  in  most  general  family  use,  tlie  con- 
stancy and  universality  of  the  demand  would  insure 
exertions  to  furnish  them  at  home,  and  the  means  are 
completely  adequate.  It  may  also  be  expected  ulti- 
mately, in  this  as  in  other  cases,  that  the  extension  of 
the  domestic  manufacture  would  conduce  to  the  cheap- 
ness of  the  article. 

It  ought  not  to  pass  unremarked,  that  to  encourage 
the  printing  of  books  is  to  encourage  the  manufacture 
of  paper. 

REFINED    SUGARS    AND    CHOCOLATE 

Are  among  the  number  of  extensive  and  prosperous 
domestic  manufactures. 

Drawbacks  of  the  duties  upon  the  materials  of  which 
they  are  respectively  made,  in  cases  of  exportation, 
would  have  a  beneficial  influence  upon  the  manufacture, 
and  would  conform  to  a  precedent  which  has  been 
already  furnished  in  the  instance  of  molasses  on  the 
exportation  of  distilled  spirits. 


REPORT  ON  MANUFACTURES.  103 

Cocoa  :  —  the  raw  material  now  jnays  a  duty  of  one 
cent  per  pound,  while  chocolate,  which  is  a  prevailing 
and  very  simple  manufacture,  is  comprised  in  the  mass 
of  articles  rated  at  no  more  than  five  per  cent. 

There  would  appear  to  be  a  propriety  in  encouraging 
the  manufacture  by  a  somewhat  higher  duty  on  its  for- 
eign rival  than  is  paid  on  the  raw  material.  Two  cents 
per  pound  on  imported  chocolate  would,  it  is  presumed, 
be  without  inconvenience. 

The  foregoing  heads  comprise  the  most  important  of 
the  several  kinds  of  manufactures  which  have  occurred 
as  requiring  and  at  the  same  time  as  most  proper  for 
public  encouragement ;  and  such  measures  for  affording 
it,  as  have  appeared  best  calculated  to  answer  the  end, 
have  been  suggested. 

The  observations  which  have  accompanied  this  delin- 
eation of  objects  supersede  the  necessity  of  many  sup- 
plementary remarks.  One  or  two,  however,  may  not  be 
altogether  superfluous. 

Bounties  are  in  various  instances  proposed  as  one 
species  of  encouragement. 

It  is  a  familiar  objection  to  them  that  they  are  diffi- 
cult to  be  managed  and  liable  to  frauds.  But  neither 
that  difficulty  nor  this  danger  seems  sufficiently  great  to 
countervail  the  advantages  of  which  tliey  are  produc- 
tive when  rightly  applied.  And  it  is  presumed  to  have 
been  shown  that  they  are  in  some  cases,  particularly  in 
the  infancy  of  new  enterprises,  indispensable. 

It  will  however  be  necessary  to  guard  with  extraor- 
dinary circumspection  the  manner  of  dispensing  them. 
The  requisite  precautions  have  been  thought  of,  but  to 
enter  into  the  detail  would  swell  this  report,  already 
v()3umiiious,  to  a  size  too  inconvenient. 

If  the  principle  shall  not  be  deemed  inadmissible, 
the  means  of  avoiding  an  abuse  of  it  will  not  be  likely 


104  ALEXANDER  HAMILTON. 

to  present  insurmountable  obstacles.     There  are  useful 
guides  from  practice  in  other  quarters. 

It  shall  therefore  only  be  remarked,  here  in  relation 
to  this  point,  that  any  bounty  which  may  be  applied  to 
the  manufacture  of  an  article  cannot  with  safety  extend 
beyond  those  manufactories  at  which  the  making  of  the 
article  is  a  regular  trade.  It  would  be  impossible  to 
annex  adequate  precautions  to  a  benefit  of  that  nature, 
if  extended  to  every  private  family  in  which  the  manu- 
facture was  incidentally  carried  on,  and  it  being  a 
merely  incidental  occupation  which  engages  a  portion 
of  time  that  would  otherwise  be  lost,  it  can  be  advanta- 
geously carried  on  without  so  special  an  aid. 

The  possibility  of  a  diminution  of  the  revenue  may 
also  present  itself  as  an  objection  to  the  arrangements 
which  have  been  submitted. 

But  there  is  no  truth  which  may  be  more  firmly  relied 
upon  than  that  the  interests  of  the  revenue  are  pro- 
moted by  whatever  promotes  an  increase  of  national 
industry  and  wealth. 

In  proportion  to  the  degree  of  these  is  the  capacity  of 
every  country  to  contribute  to  the  pvxblic  treasury  ;  and 
where  the  capacity  to  pay  is  increased  or  even  is  not 
decreased,  the  only  consequence  of  measures  which  di- 
minish any  particular  resource  is  a  change  of  the  object. 
If  by  encouraging  the  manufacture  of  an  article  at 
home,  the  revenue  which  has  been  wont  to  accrue  from 
its  importation  should  be  lessened,  an  indemnification 
can  easily  be  found  either  out  of  the  manufacture  itself, 
or  from  some  other  object  which  may  be  deemed  more 
convenient. 

The  measures,  however,  which  have  been  submitted, 
taken  aggregately,  will  for  a  long  time  to  come  rather 
augment  than  decrease  the  pviblic  revenue. 

There  is  little  room  to  hope  that  the  progress  of  man- 
ufactures will  so  eriually  keep  pace  with  the  progress  of 


REPORT  ON  MANUFACTURES.  105 

population  as  to  prevent  even  a  gradual  augmentation 
of  the  product  of  the  duties  on  imported  articles. 

As,  nevertheless,  an  abolition  in  some  instances  and 
a  reduction  in  others  of  duties  which  have  been  pledged 
for  the  public  debt  is  proposed,  it  is  essential  that  it 
should  be  accompanied  with  a  competent  substitute. 
In  order  to  this,  it  is  requisite  that  all  the  additional 
duties  which  shall  be  laid  be  appropriated,  in  the  first 
instance,  to  replace  all  defalcations  which  may  proceed 
from  any  such  abolition  or  diminution.  It  is  evident 
at  first  glance  that  they  will  not  only  be  adequate  to 
this  but  will  yield  a  considerable  surplus.  This  surplus 
will  serve, 

First.  To  constitute  a  fund  for  paying  the  bounties 
which  have  been  decreed. 

Secondly.  To  constitute  a  fund  for  the  operations 
of  a  board  to  be  established  for  promoting  arts,  agri- 
culture, manufactures  and  commerce.  Of  this  institu- 
tion different  intimations  have  been  given  in  the  course 
of  this  report.  An  outline  of  a  plan  for  it  shall  now 
be  submitted. 

Let  a  certain  annual  sum  be  set  apart  and  placed 
under  the  management  of  commissioners,  not  less  than 
three,  to  consist  of  certain  officers  of  the  government 
and  their  successors  in  office. 

Let  these  commissioners  be  empowered  to  apply  the 
fund  confided  to  them  to  defray  the  expenses  of  the 
emigration  of  artists  and  manufacturers  in  particular 
branches  of  extraordinary  importance  ;  to  induce  the 
prosecution  and  introduction  of  useful  discoveries,  in- 
ventions and  improvements  by  proportionate  rewards, 
judiciously  held  out  and  applied ;  to  encourage  by  pre- 
miums, both  honorable  and  lucrative,  the  exertions  of  in- 
dividuals and  of  classes  in  relation  to  the  several  objects 
they  are  charged  with  promoting  ;  and  to  afford  such 
other  aids  to  those  objects  as  may  be  generally  desig- 
nated by  law. 


106  ALEXANDER  HAMILTON. 

The  commissiouers  to  render  to  the  legislature  an 
annual  account  of  their  transactions  and  disbursements ; 
and  all  such  sums  as  shall  not  have  been  applied  to  the 
purposes  of  their  trust,  at  the  end  of  every  three  years 
to  revert  to  the  treasury.  It  may  also  be  enjoined  upon 
them  not  to  draw  out  the  money  but  for  the  purpose  of 
some  specific  disbursement. 

It  may,  moreover,  be  of  use  to  authorize  them  to  re- 
ceive voluntary  contributions,  making  it  their  duty  to 
apply  them  to  the  particular  objects  for  which  they  may 
have  been  made,  if  any  shall  have  been  designated  by 
the  donors. 

There  is  reason  to  believe  that  the  progress  of  par- 
ticular manufactures  has  been  much  retarded  by  the 
want  of  skillful  workmen,  and  it  often  happens  that  the 
capitals  em})loyed  are  not  equal  to  the  purposes  of 
bringing  from  abroad  workmen  of  a  superior  kind. 
Here,  in  cases  worthy  of  it,  the  auxiliary  agency  of  gov- 
ernment would  in  all  probability  be  useful.  There  are 
also  valuable  workmen  in  every  branch  who  are  pre- 
vented from  emigrating  solely  by  the  want  of  means. 
Occasional  aids  to  such  persons,  properly  administered, 
might  be  a  source  of  valuable  acquisitions  to  the 
country. 

The  propriety  of  stimulating  by  rewards  the  inven- 
tion and  introduction  of  useful  improvements,  is  admit- 
ted without  difficulty.  But  the  success  of  attempts  in 
this  way  must  evidently  depend  much  on  the  manner 
of  conducting  them.  It  is  probable  that  the  j)lacing  of 
the  dispensation  of  those  rewards  under  some  proper 
discretionary  direction  where  they  may  be  accompanied 
by  collateral  expedients  will  serve  to  give  them  the 
surest  efficacy.  It  seems  impracticable  to  apportion,  by 
general  rules,  specific  compensations  for  discoveries  of 
unknown  and  disproportionate  utility. 

The  great  use  which  may  be  made  of  a  fund  of  this 


REPORT  ON  MANUFACTURES.  107 

nature,  to  procure  and  import  foreign  improvements,  is 
particularly  obvious.  Among  these,  the  article  of  ma- 
chines would  form  a  most  important  item. 

The  operation  and  utility  of  premiums  have  been  ad- 
verted to,  together  with  the  advantages  which  have 
resulted  from  their  dispensation  under  the  direction  of 
certain  public  and  private  societies.  Of  this  some  ex- 
perience has  been  had  in  the  instance  of  the  Pennsyl- 
vania Society  for  the  promotion  of  manufactures  and 
useful  arts,  but  the  funds  of  that  association  have  been 
too  contracted  to  produce  more  than  a  very  small  por- 
tion of  the  good  to  which  the  principles  of  it  would 
have  led.  It  may  confidently  be  affirmed  that  there  is 
scarcely  anything  which  has  been  devised  better  calcu- 
lated to  excite  a  general  spirit  of  improvement  than  the 
institutions  of  this  nature.     They  are  truly  invaluable. 

In  countries  where  there  is  great  private  wealth,  much 
may  be  effected  by  the  voluntary  contributions  of  patri- 
otic individuals,  but  in  a  community  situated  like  that 
of  the  United  States,  the  public  purse  must  supply  the 
deficiency  of  private  resource.  In  what  can  it  be  so 
useful  as  in  promoting  and  improving  the  efforts  of  in- 
dustry ? 

All  of  which  is  humbly  submitted. 

ALEXANDER  HAMILTON, 

Secretary  of  the  Treasury. 


MEMORIAL    OF    THE    COMMITTEE    OF    THE 
FKEE   TRADE   CONVENTION, 

Held  at  Philadeljihia  in  September  and  October,  1831, 
remonstrating  against  the  existing  Tariff  of  Duties. 


New  York,  2Zd  January,  1832. 
SiK  : — I  have  the  honor  to  inclose  the  memorial  of 
the  committee  appointed  by  the  convention  of  delegates 
from  several  States,  held  at  Philadelphia  in  September 
and  October,  1831,  for  the  purpose  of  preparing  and 
presenting  to  Congress  a  memorial  setting  forth  the 
evils  of  the  existing  tariff  of  duties,  and  asking  such  a 
modification  of  the  same  as  shall  be  consistent  with  the 
purposes  of  revenue,  and  equal,  in  its  operation,  on  the 
different  parts  of  the  United  States,  and  on  the  various 
interests  of  the  same. 

I  pray  that  the  said  memorial  may  be  laid  before  the 
Senate ;  and  have  the  honor  to  be,  ' 

With  great  respect,  sir, 

Your  most  obedient  servant, 

ALBERT   GALLATIN, 

Chairman  of  the  Committee. 
The  Hon.  John  C.  Calhoun, 

Vice-President  of  the  United  States, 

and  President  of  the  Senate. 


FUSE  TRADE  MEMORIAL.  109 

To  the  Honorable  the  Senate  and  House  of  Representa- 
tives  of  the  United  States,  in  Congress  assembled :  — 

The  memorial  of  the  committee  appointed  for  that  pur- 
pose by  the  ''  Free  Trade  Convention,"  held  at  Phila- 
delphia in  September  and  October,  1831, 

Respectfully  shows  :  — 

That  a  convention  of  delegates  appointed  by  public 
meetings  in  various  States  of  the  Union,  for  the  purpose 
of  cooperating,  by  constitutional  and  legal  measures,  in 
procuring  the  repeal  of  the  restrictive  system,  was  held 
at  Philadelphia  on  the  30th  of  September,  1831,  and 
continued  in  session  till  the  7th  October  ensuing ;  when 
a  committee,  consisting  of  one  member  from  each  State 
represented  in  the  convention,  was  appointed  for  the 
purpose  of  preparing  a  memorial  to  Congress,  setting 
forth  the  evils  of  the  existing  tariff  of  duties,  and  ask- 
ing such  a  modiiication  of  the  same  as  shall  be  consist- 
ent with  the  purposes  of  revenue,  and  equal  in  its  oper- 
ation on  the  different  parts  of  the  United  States,  and 
on  the  various  interests  of  the  same. 

Acting  under  that  appointment,  your  memorialists 
respectfully  pray  :  — 

1st.  That  the  duties  be  so  reduced,  as  to  leave,  after 
the  extinguishment  of  the  public  debt,  only  that  amount 
of  revenue  which  may  be  necessary  to  meet  the  ordinary 
exigencies  of  Government. 

2dly.  That,  allowing  a  reasonable  time  for  a  gradual 
reduction  of  the  present  exaggerated  duties  on  some 
articles,  tlie  duties  on  all  the  imported  articles  not  free 
of  duty  be  ultimately  equalized,  so  as  that  the  duty  on 
any  such  article  shall  not  vary  materially  from  the  gen- 
eral average  rate  of  all  the  duties  together,  or,  in  other 
words,  from  a  uniform  duty  ad  valorem  on  all  imi^orted 
articles  subject  to  duty. 

3dly.    That  wines,  teas,  coffee,  and  similar  articles,  be 


110  ALBERT  GALLATIN. 

not  (ulclecl  to  the  list  of  those  now  free  of  duty,  but  may, 
on  the  contrary,  be  subject  to  duties  corresponding,  in 
proportion  to  their  respective  value,  with  those  laid  on 
other  imported  articles  subject  to  duty. 

It  is  hoped  that  no  essential  difference  of  opinion  ex- 
ists respecting  the  general  reduction  of  the  revenue. 

As  soon  after  the  organization  of  the  existing  Gov- 
ernment of  the  United  States  as  a  sufficient  revenue 
had  been  provided,  and  the  first  difficulties  which  they 
had  to  encounter  had  been  surmounted,  Congress  adopted 
the  most  efficient  measures  for  the  reimbursement  of 
the  debt  necessarily  incurred  in  asserting  and  secur- 
ing the  national  independence.  An  annual  appropria- 
tion of  $8,000,000,  founded  on  a  real  excess  of  revenue 
beyond  the  current  expenditures,  had,  in  ten  years,  re- 
duced the  debt  from  .f  97,000,000  (including  therein  the 
$15,000,000  paid  for  Louisiana)  to  145,000,000,  when 
the  prospect  of  extinguishing  the  whole  within  six  years 
was  frustrated  by  the  late  war  with  Great  Britain.  After 
the  restoration  of  peace,  the  whole  of  the  public  debt, 
including  arrears  afterwards  paid  or  funded,  and  the 
subsequent  payment  of  the  Florida  claims,  exceeded, 
on  the  1st  of  January,  1816,  $120,000,000.  Congress, 
without  delay,  raised  the  annual  appropriation  for  the 
debt  to  $10,000,000,  and  provided  a  revenue  sufficient 
not  only  for  the  payment  of  that  sum,  and  for  dis- 
charging the  current  expenses  of  Government,  but  also 
for  the  gradual  increase  of  the  means  of  defense  by  land 
and  by  sea,  to  the  providing  of  which  the  former  reve- 
nue was  inadequate.  At  the  end  of  sixteen  years,  dur- 
ing which  the  same  measures  have  been  unremittingly 
pursued,  the  public  debt  is  accordingly  reduced  nomi- 
nally to  little  more  than  $24,000,000  —  in  fact,  to  less 
than  $17,000,000  —  an  equivalent  for  the  difference  be- 
ii^g  found  in  the  bank  shares,  the  property  of  the  United 
States,   which   have   been   paid  for   during    the    same 


FREE  TRADE  MEMORIAL.  Ill 

period.  The  revenue  wliich  will  be  actually  received, 
and  tliat  which,  will  accrue  in  the  course  of  the  year 
1832,  will  be  sufficient  to  reimburse  the  whole  of  the 
$21,000,000  still  due.  And,  even  without  recurring  to 
the  "Bank  shares  owned  by  the  United  States,  the  exist- 
ing duties  may  be  reduced  near  $12,000,000  from  the 
1st  of  January,  1832. 

The  people  of  the  United  States  have  constantly  sus-- 
tained  their  representatives  in  the  measures  necessary 
for  the  attainment  of  that  great  object.  They  have  for 
more  than  thirty  years  cheerfull}^  submitted  to  the  bur- 
dens laid  for  that  special  purpose ;  and  tbe}^  are  thus 
enabled  to  transmit,  f^-ee  of  any  incumbrance,  to  the 
growing  generation,  the  glorious  inheritance  received 
from  their  fathers.  But  they  have  a  right  to  expect 
that  the  burdens  shall  cease  with  the  occasion  for  which 
they  were  laid,  and  that  the  intended  reduction  will  be 
made  in  good  faith,  without  reserve,  and  to  the  full 
extent  of  the  sum  which  is  no  longer  wanted. 

The  payments  for  the  public  debt  have,  during  the 
ten  years,  1821  to  1830,  exceeded  the  annual  appropria- 
tion of  $10,000,000.  Including  the  payment  of  the  Flor- 
ida claims,  the  average  annual  payments,  during  the 
first  five  years,  exceeded  $11,000,000  ;  and  they  have, 
during  the  last  five  years,  amounted  to  near  $11,400,000. 

The  average  annual  amount  of  all  the  other  ex|)enses 
of  Government  (deducting  the  repayment  to  the  claim- 
ants of  the  sum  paid  by  Great  Britain  into  the  Treasury 
for  claims  under  the  first  article  of  the  treaty  of  Ghent) 
has  been,  for  the  whole  ten  years,  about  $11,600,000, 
viz.,  for  the  first  five  years  less  than  $10,500,000,  and 
for  the  last  five  years  more  than  $12,500,000.  Two 
years  only,  those  expenses  have  exceeded  $13,000,000; 
in  1826,  by  about  $60,000,  and,  in  1830,  by  $230,000. 
A  net  revenue  of  $13,000,000  is  therefore  sufficient  to 
meet,   after   the    extinguishment   of   the    de'it,   all   the 


\ 


112  ALBERT  GALLATIN. 

exigencies  of  Government,  according  to  the  present 
scale  of  expenditure. 

It  is  strictly  just  that  all  classes  of  citizens,  and  every 
section  of  the  country,  should  share  in  the  benefits 
arising  from  the  reduction  of  the  public  burdens.  That 
reduction  ought  to  apply  as  well  to  the  revenue  arising 
from  the  public  lands  as  to  the  duties  on  importation. 
Your  memorialists  do  not  pretend  to  suggest  what,  in 
their  opinion,  would  be  a  proper  reduction  on  each 
branch  ;  but  they  had  concluded,  that,  at  all  events,  the 
necessary  sum  to  be  drawn  from  the  impost  would  fall 
short  of  $13,000,000.  A  different  disposition  of  the 
public  lands  has  been  suggested  by  the  Secretary  of 
the  Treasury.  Unprepared  for  that  proposal,  and  igno- 
rant of  the  views  on  that  subject  entertained  by  those 
in  whose  behalf  your  memorialists  now  apply  to  your 
honorable  body,  they  will  abstain  from  giving  an  opin- 
ion on  that  question;  and,  in  order  to  meet  any  plan 
which  may  be  adopted  in  that  respect,  they  will  argue 
as  if  the  whole  revenue  was  to  be  exclusively  drawn 
from  the  duties  on  importation.  But  they  beg  leave 
earnestly  to  remonstrate  against  any  attempt  to  provide 
a  permanent  revenue  of  $15,000,000,  or  exceeding  the 
present  rate  of  expenditure  for  other  objects  than  the 
public  debt. 

A  revenue  derived  from  the  same  rate  of  duties  on 
importation  will  in  the  United  States  gradually  increase, 
though  in  a  much  slower  ratio  than  the  population. 
The  average  annual  gross  revenue  on  merchandise 
amounted,  during  the  years  1821  to  1825,  to  $20,250,- 
000  ;  and  during  the  years  1826  to  1830,  to  $23,130,000, 
showing  an  increase  of  about  14%  within  five  years. 
But  as  the  rate  of  duties  was  altered  by  the  tariffs  of 
1824  and  1828,  a  more  correct  criterion  of  the  increase 
may  perhaps  be  found  in  the  comparative  value  of 
the  domestic  exports,  with  which  the  importations  are 


FREE  TRADE  MEMORIAL.  113 

paid,  and  which,  during  the  same  period,  have  increased 
about  6(/o)  or  at  the  rate  of  about  1%  a  year.  Mode- 
rate duties  will  also,  as  they  always  do,  produce  a 
greater  proportionate  revenue  than  when  raised  to  an 
extravagant  rate.  The  saving  alone  in  the  expenses  of 
collection  Avould  defray,  within  a  short  time,  all  the 
expense  necessary  for  building  custom-houses  and  giv- 
ing adequate  salaries  to  the  officers  who  may  not  be 
sufficiently  remunerated.  For,  to  the  tariff  of  1828,  and 
to  its  system  of  minimums  alone,  can  be  ascribed  the 
great  increase  in  the  expenses  of  collection  between  the 
years  1828  and  1830.  The  gross  revenue  on  customs 
amounted,  in  1828,  to  $25,846,000,  and  those  expenses 
to  $869,000 ;  the  gross  revenue  of  1830  to  $23,720,000, 
and  the  expenses  to  $1,024,000,  or  to  4.31%  instead  of 
3.38%  on  the  revenue. 

The  revolutionary  pensions  will  also  be  gradually  di- 
minished ;  and,  considering  the  great  increase  of  the 
current  expenditure  during  the  last  five  years,  a  well 
founded  hope  is  entertained  that  this  may  be  lessened, 
without  any  injury  to  the  public  service,  by  a  strict 
adherence  to  the  specific  appropriations  made  by  law, 
improved  order  and  regularity  in  the  superintendence 
of  every  branch  of  expenditure,  constant  vigilance  in 
checking  abuses,  and  a  proper  discrimination  between 
just  and  unfounded  claims. 

Your  memorialists  wish  it  to  be  distinctly  understood 
that  they  ask  only  for  a  wise  and  skillful  economy,  and 
not  for  a  retrenchment  of  any  of  the  expenses  necessary 
for  the  defense  of  the  country,  or  for  any  object  calcu- 
lated to  promote  its  prosperity,  which  is  embraced  in 
the  legitimate  powers  of  the  General  Government.  They 
will  only  observe  that  the  average  annual  amount  of 
expenses  of  the  years  1820,  1830,  for  all  other  objects 
than  the  public  debt,  falls  short  of  $13,000,000  ;  out  of 
which  the  annual  average  expenditure  for  the  progress 


114  ALBERT  GALLATIN. 

and  accumulation  of  the  means  of  defense,  including  the 
increase  of  the  navy,  fortifications,  ordnance,  and  mate- 
rials, has  amounted  to  $1,575,000,  and  that  for  internal 
improvements  of  every  description,  and  in  every  quar- 
ter, to  .f!l,275,000.  It  is  obvious  that  the  expense  under 
the  first  head  is,  from  its  nature,  definite;  and  that, 
after  the  intended  fortifications  and  public  ships  shall 
have  been  completed,  and  the  necessary  stock  of  arms, 
ordnance,  and  every  species  of  materials,  either  for  the 
land  or  sea  service,  been  provided,  the  expense  will  be 
reduced  to  that  of  repairs  and  keeping  up  the  stock.  If, 
in  the  meanwhile,  the  existing  annual  appropriations  for 
those  great  objects  should  be  deemed  inadequate  ;  if  an 
earlier  completion  of  any  or  all  of  them  is  desirable,  an 
additional  revenue  for  that  purpose  can  only  be  wanted 
for  a  short  time,  and  will  be  supplied  by  the  surplus 
arising  from  the  gradual,  instead  of  an  immediate,  re- 
duction of  the  high  existing  duties. 

For  the  clearer  understanding  of  the  object  they  have 
in  view,  and  of  the  effect  of  the  measures  which  they 
solicit,  on  the  several  interests  of  the  country,  it  is  nec- 
essary in  the  first  instance  to  form  at  least  an  approxi- 
mate estimate  of  the  average  rate  of  duty,  which,  if 
levied  equally  on  all  the  imports  now  subject  to  duty, 
would  produce  a  nett  annual  revenue  of  $13,000,000, 
equivalent  to  a  gross  revenue,  including  the  expenses 
of  collection,  of  about  $13,600,000. 

The  avera,ge  annual  value  of  foreign  merchandise, 
subject  to  duty,  consumed  in  the  United  States  during 
the  six  years,  1825  to  1830,  is,  according  to  the  official 
"  statements  of  the  commerce  and  navigation,"  $54,664,- 
000.  The  reexportations  of  foreign  articles  paying  spe- 
cific duties  are,  however,  overrated  in  those  statements 
(probably  from  having  been,  in  most  cases,  estimated  at 
lo7i(/  jyrtces,  that  is  to  say,  including  the  duty)  by  a  sum 
amounting  to  about  $1,650,000  a  year.    And  the  articles 


FREE  TRADE  MEMORIAL.  115 

paying  duties  ad  valorem,  which  are  imported  from 
Great  Britain  and  Ireland,  being  valued  at  the  rate  of 
4s.  Gd.  sterling  per  dollar,  are  underrated  by  a  sum 
amounting,  after  deducting  the  reexportations,  to  about 
^1,345,000  a  year.  The  actual  annual  consumption  for 
those  six  years  may  therefore  be  estimated  at  about 
$57,500,000.  As  there  are  goods,  not  entitled  to  draw- 
back, exported  to  an  amount  of  $800,000  or  $900,000  a 
year,  on  which  the  duty  is  paid,  although  they  are  not 
consumed  in  the  United  States,  an  average  duty  of  25% 
will  commonly  produce  $200,000  more  than  the  esti- 
mate. Judging  from  analogy,  the  imports  will,  with  the 
growth  of  the  country,  continue  also  gradually,  though 
slowly,  to  increase.  The  estimate  of  the  gross  revenue 
at  $13,500,000,  and  of  the  value  of  imported  articles 
paying  duty  at  $57,500,000,  will  therefore  produce  a 
net  revenue  exceeding  $13,000,000  ;  and  that  estimate 
gives,  for  the  required  average  or  uniform  duty  ad  valo- 
rem, near  23A%  actual,  or  less  than  21i%  nominal  duty. 
For  it  Avill  be  recollected  that,  on  account  of  the  addi- 
tion to  the  prime  cost  of  10%  or  20%,  according  to  the 
place  whence  imported,  a  nominal  duty  of  20%  is,  in 
fact,  one  of  24%  on  goods  imported  from  countries  be- 
yond the  Cape  of  Good  Hope,  and  of  22%  on  goods 
imported  from  other  places. 

According  to  the  same  premises,  the  average  duty  re- 
quired to  produce  a  nett  revenue  of  $13,000,000  would 
amount  to  near  27%,  if  wines,  teas,  coffee,  cocoa,  spices, 
and  fruits  were  exempted  from  duty.  A  nett  revenue 
of  $15,000,000  would  require,  in  that  case,  an  average 
duty  of  31%  and  of  27%,  if  those  articles  were  subject 
to  the  same  duty  as  every  other  import.  The  present 
average  duty,  calculated  on  the  average  revenue  derived 
from  customs,  during  the  same  period  of  six  years,  will 
be  found  to  exceed  40%. 

As  a  difference  of  3%  or  4%  in  the  rate  of  an  aver- 


116  ALBERT  GALLATIN. 

age  duty,  or  of  the  aggregate  of  duties,  would  on  near 
^60,000,000  of  taxed  imports  produce  a  difference  of 
$2,000,000  in  the  revenue,  the  attention  of  Congress 
will,  under  any  modification  of  the  tariff  that  may  be 
adopted,  be  necessarily  drawn  to  tliat  subject.  A  thor- 
ough investigation  will  lead  to  much  more  correct  results 
than  those  which  are  now  presented.  But  this  rough 
estimate  is  sufficient  for  our  principal  purpose.  An 
error  of  even  5%  in  the  rate  becomes  almost  unimpor- 
tant, when  contending  against  duties  r"  50%  and  more 
than  100%. 

Your  memorialists  are  aware  that,  even  for  the  pur- 
poses of  revenue,  a  strict  adherence,  in  every  instance, 
to  a  uniform  rate  of  duty  would  be  attended  with  great 
inconvenience.  There  is  propriety  in  taxing  articles  of 
luxury  in  preference  to  those  more  generally  used  by 
the  less  wealthy  classes  of  society.  Yet  it  is  found 
necessary  to  lessen  the  duty  on  watches,  jewelry,  thread 
lace,  and  other  articles,  which  from  their  great  value  in 
a  small  bulk  may  with  facility  be  fraudulently  imported. 

Considerations  of  a  higher  nature  may  render  a  great 
reduction  of  the  duties  on  spirits  improper.  An  excep- 
tion has  always  been  admitted  with  respect  to  articles 
necessary  for  the  defense  of  the  country.  When  ask- 
ing for  a  uniform  duty  which,  whether  specific  or  laid 
ad  valorem,  shall  not  exceed  the  rate  of  20%  to  25%, 
as  sufficient  for  the  purposes  of  revenue,  your  memo- 
rialists submit  the  proposition  as  a  general  principle. 
But,  whilst  admitting  that  duties  not  exceeding  in  the 
aggregate  the  amount  thus  required  may  be  arranged 
as  the  necessary  exceptions  to  the  general  rule  shall 
require,  they  contend  that  any  considerable  variation 
from  the  average  rate,  for  the  purpose  of  favoring 
special  branches,  is  injurious  to  American  industry,  at- 
tended witli  certain  national  loss,  unequal  and  oppres- 
sive in  its  operation,  both  with  regard  to  the  several 


FUEE  TRADE  MEMORIAL.  117 

classes  of  society  and  to  the  several  sections  of  the 
country. 

We  are  not  called  upon  to  discuss  the  abstract  ques- 
tion whether  another  mode  of  taxation  would  be  more 
eligible  than  the  impost,  or  whether  an  unrestrained 
intercourse  between  all  nations,  free  of  the  payment  of 
any  duties  on  imports,  would  be  best  calculated  to  pro- 
mote the  industry  and  prosperity  of  all.  On  that  sub- 
ject the  experience  of  forty  years  is  conclusive,  so  far 
as  relates  to  the  United  States.  The  people  prefer, 
in  time  of  peace,  duties  raised  on  the  importation  of 
foreign  merchandise  to  any  internal  tax,  direct  or  indi- 
rect. Whether  for  good  or  for  evil,  that  system  af- 
fords an  encouragement  to  domestic  manufactures  not 
less  efficient  for  being  incidental.  Duties  on  imports, 
amounting  on  an  average  to  about  20%  on  the  value, 
appear  necessary  to  the  support  of  Government.  Al- 
though they  may,  to  that  extent,  by  diverting  national 
industry  from  its  natural  channels,  render  it  less  pro- 
ductive ;  although  they  may,  to  that  extent,  lay  a  tax 
on  the  consumers  in  addition  to  that  which  is  paid  to 
Government ;  although  they  operate  unequally  on  dif- 
ferent sections  of  the  country ;  all  your  memorialists 
ask  is,  that  the  evil  shall  not  be  aggravated  by  an  in- 
equality in  the  rates  of  duty.  The  question  then  at 
issue  is,  simply,  whether  the  amount  wanted  shall  be  so 
raised  as  to  fall  et^ually  upon  all  the  consumers,  or,  in 
other  words,  on  the  community,  and  so  as  to  encourage 
equally  every  branch  of  industry,  or  whether  certain 
branches  shall  receive  special  protection  by  high  and 
sometimes  prohibitory  duties. 

Whether  taxes  are  laid  on  income  or  on  consumption, 
it  is  equally  the  duty  of  a  government  founded  in  jus- 
tice to  lay  them  equally  on  all,  in  proportion,  as  the 
case  may  be,  to  the  income  or  the  consumption.  Were 
there  no  taxes  of  the  latter  description,  every  part  of 


118  ALBERT  GALLATIN. 

the  country,  and  every  class  of  society,  would  be  left  at 
liberty  to  sup})ly  its  wants  on  the  cheapest  terms,  and 
to  pursue  that  branch  of  industry  for  which  each  was 
best  fitted.  If  a  tax,  equivalent  to  an  average  duty  of 
20%  (or  at  any  other  rate)  on  all  foreign  commodi- 
ties becomes  necessary  for  the  support  of  Government, 
and  is  laid  at  an  equal  and  uniform  rate  on  all  such 
commodities,  all  the  sections  of  the  country,  classes  of 
society,  and  individuals,  are  left  as  far  as  ])racticable 
in  the  same  relative  situation  as  before.  But  any  law 
materially  varying  the  rate  on  any  of  the  taxed  articles 
will  in  some  respect  change  that  relative  situation,  and 
to  an  extent  proportionate  to  the  change  render  the 
burden  of  the  tax  unequal.  An  alteration  which  thus 
deranges  the  natural  order  of  things  should  at  least  be 
productive  of  an  adequate  and  indisputable  advantage 
to  the  community.  Higher  duties  on  luxuries  than  on 
articles  generally,  and  in  some  cases  exclusively,  used 
by  the  less  wealthy  classes  of  society,  are  justified  by 
the  propriety  of  laying  a  heavier  burden  on  those  who 
are  the  best  able  to  bear  it.  The  domestic  manufacture 
of  a  sufficient  stock  of  arms,  by  Government  or  by  con- 
tract, at  a  much  higher  price  than  they  could  be  pro- 
cured abroad  may  be  necessary,  in  order  to  secure  at  all 
times  a  supply  of  those  indispensable  means  of  defense. 
Raw  materials  are  admitted  free  of  duty,  because  they 
are  not,  in  that  state,  immediate  objects  of  consump- 
tion, but  necessary  ftn"  the  production  of  commodities 
to  which  the  national  industry  may  be  advantageously 
a])plied.  The  presumed  advantages  of  the  restrictive 
system  should  be  equally  palpable  and  clearly  demon- 
strated :  the  burden  of  the  proof  lies  altogether  on  its 
advocates. 

Let  it,  however,  be  recollected  that  even  the  general 
benefit  arising  to  the  country  at  large  may  not  always  be 
a  sufficient  justification  of  great  and  imi)ortant  deviations 


FREE  TRADE  MEMORIAL.  119 

from  the  equal  and  uniform  system  of  taxation.  A  gov- 
ernment which  acknowledges  the  principle  that  no  indi- 
vidual can  be  divested  of  his  property  for  public  purposes 
without  indemnity  cannot  claim  the  right  to  do  that  in- 
directly which  it  is  forbidden  to  do  directly.  A  system 
calculated  to  lay  permanent  burdens,  greatly  unequal 
and  oppressive,  on  some  classes  of  society,  or  on  a  par- 
ticular section  of  the  coiintry,  would  be  radically  unjust 
and  altogether  indefensible,  even  though  it  might  be  at- 
tended with  some  advantages  to  the  community  consid- 
ered as  a  whole.  But  whether  such  advantages  are  in 
fact  realized ;  whether,  on  any  supposition,  they  ever 
can  produce  a  profit  equal  to  the  actual  national  loss 
arising  even  from  the  indispensable  duty  of  20%  to 
25%,  must  be  first  examined. 

It  is  self-evident  that  the  industry  of  a  country  is 
most  profitably  employed,  or,  in  other  words,  that  a 
country  acquires  the  greatest  wealth,  and  its  general 
prosperity  is  most  advanced,  in  proportion  as  its  capital 
and  labor  are  most  productive. 

It  is  not  less  obvious  that,  if  a  given  amount  of  capi- 
tal and  labor  produces  in  the  same  time  a  less  quantity 
of  a  certain  commodity  than  could  have  been  purchased 
with  that  quantity  of  another  article  which  might  have 
been  produced  in  the  same  time  by  the  same  amount  of 
capital  and  labor,  there  has  been  a  misapplication  of  such 
capital  and  labor,  and  a  national  loss  equal  to  the  differ- 
ence between  the  quantity  produced  and  that  which  might 
have  been  purchased  with  the  proceeds  of  the  same 
capital  and  labor  otherwise  applied. 

If  the  price  at  which  a  commodity  can  be  afforded  by 
the  person  who  undertakes  to  produce  it  is  higher  than 
that  at  which  it  may  be  or  might  have  been  purchased 
from  others,  the  difference  of  price  is  the  measure  of 
tlie  national  loss  incu.rred  by  his  misapplication  of  capi- 
tal and  labor  to  the  production  of  that  commodity. 


120  ALBERT  GALLATIN. 

With  one  thousand  bushels  of  wheat,  worth  $1  a 
b\ishel,  one  thousand  yards  of  cloth  of  a  certain  quality 
may  be  purchased.  If  the  capital  and  labor  employed, 
or  which  might  be  employed,  in  producing  the  thousand 
bushels  of  wheat,  do,  when  applied  to  the  production  of 
similar  cloth,  produce  in  the  same  time  one  thousand 
yards,  there  is  neither  comparative  gain  or  loss  in  that 
application  of  capital  and  labor.  But,  if  thus  applied, 
it  produces  only  eight  hundred  yards,  there  is  an  actual 
national  loss  of  two  hundred  yards,  equal  to  $200  or 
to  two  hundred  bushels  of  wheat,  since  the  same  labor 
and  capital,  if  applied  to  the  production  of  wheat,  would 
have  produced  one  thousand  bushels,  with  which  one 
thousand  yards  of  the  cloth  might  have  been  purchased. 

There  is  not  the  slightest  difference  in  the  result, 
whether  the  cloth,  which  might  have  been  thus  pur- 
chased at  f  1  a  yard,  was  manufactured  in  the  same 
district  where  the  unfortunate  new  undertaker  resided, 
or  Avhether  it  was  imported,  either  from  another  district 
of  the  same  country  or  from  a  foreign  country.  In 
either  case,  it  is  again  self-evident  that  the  national 
loss  is  precisely  the  same. 

If  the  new  manufacturer  (making  a  reasonable  profit) 
can  afford  to  sell  his  cloth  at  $1  a  yard,  it  is  a  proof 
that  there  has  been  no  misapplication  of  capital  and 
labor,  and  neither  comparative  gain  or  loss,  in  having 
produced  cloth  instead  of  wheat.  But  if  he  cannot  af- 
ford without  loss.to  sell  the  cloth  for  less  than  $1.25 
a  yard ;  if  he  cannot  (making  a  reasonable  profit)  afford 
to  sell  eight  hundred  yards  for  less  than  $1,000 ;  it  is 
certain  that  the  same  capital  and  labor,  which  might 
have  been  applied  in  producing  one  thousand  bushels 
of  wheat,  with  which  one  thousand  yards  of  the  cloth 
might  have  been  purchased,  has  within  the  same  time 
produced  but  eight  hundred  yards,  and  that  a  national 
loss  equivalent  to  $200,  or  to  two  hundred  bushels  of 


FREE  TRADE  MEMORIAL.  121 

wheat,  has  been  incurred  by  this  misapplication  of  the 
national  industry. 

The  difference  between  the  price  at  which  a  manu- 
facturer can  afford  to  sell  the  whole  amount  of  the 
commodities  produced  by  him  in  one  year,  and  that  at 
which  the  same  quantity  of  the  same  articles  may  be, 
or  might  have  been,  purchased  from  others,  is  therefore 
equal  to  the  annual  national  profit  or  loss  resulting  from 
his  application  of  capital  and  labor  to  that  instead  of 
any  other  braiich  of  industry. 

When  the  new  manufacturer  has  to  compete  with 
others  of  the  same  country,  or,  if  there  is  no  duty  on 
imports,  with  foreign  manufacturers,  as  it  is  impossible 
for  him  to  sell  cloth  of  the  same  quality  at  a  higher 
price  than  it  can  be  obtained  from  others,  the  loss  must 
necessarily  fall  on  him.  This  is  not  the  less  a  public 
loss  on  that  account.  On  whomsoever  this  may  fall,  a 
diminution  of  the  quantity  or  exchangeable  value  of 
the  commodities  which,  with  the  same  capital  and  labor 
otherwise  applied,  might  have  been  produced  is  so  much 
retrenched  from  what  would  otherwise  have  been  an 
accumulation  of  capital  or  national  wealth. 

Although  there  may  be  occasional  rash  undertakings, 
it  is  also  an  indisputable  truth,  that  the  immense  ma- 
jority, even  of  this  most  enterprising  nation,  pursues 
only  such  branches  of  industry  as  are  attended  with 
profit.  The  losing  manufacturer,  having  discovered  his 
error,  would  not,  if  let  alone,  persevere  in  ruining 
himself ;  and  such  abortive  attempts,  abandoned  in  time, 
would  on  the  whole  produce  but  a  comparatively  small 
loss  to  the  community.  It  happens  quite  otherwise 
when  from  any  peculiar  circumstances  the  legislature  is 
unfortunately  induced  to  interfere  in  the  pursuits  of 
indiTstry,  instead  of  confining  its  care  to  that  of  provid- 
ing by  wise  laws  for  the  security  and  equal  protection 
of  the  personal  rights  and  property  of  every  individual. 


122  ALBERT  GALLATIN. 

If  the  competition  is  with  foreign  merchandise,  and 
the  legishiture  lays  on  this  a  duty  of  25%  ad  valorem, 
the  importer  cannot  afford  the  cloth  which  he  previ- 
ously sold  at  $1  for  a  price  less  than  $1.25  a  yard. 
The  manufacturer  at  home  is  thus  enabled  to  sell  his 
at  the  same  price,  and  by  obtaining  $1,000  for  the 
eight  hundred  yards,  to  receive  the  same  reasonable 
profit  as  at  the  time  may  generally  be  derived  from  the 
application  of  capital  and  labor  in  similar  pursuits. 
Since  the  duty  in  this  instance  is  not  prohibitory,  the 
cloth  of  that  quality  which  is  wanted  for  the  consump- 
tion of  the  country  will  be  supplied  in  part  by  the  for- 
eign importers  and  partly  by  the  home  manufacturers. 
On  the  whole  amount,  whether  foreign  or  domestic,  the 
consumer  will  be  obliged,  so  long  as  there  is  no  general 
reduction  of  price,  to  pay  25%  more  than  formerly. 
The  amount  of  the  additional  price  thus  paid  for  the 
foreign  cloth  being  paid  by  the  importer  into  the  Treas- 
ury, is  only  an  additional  tax,  which,  as  it  relieves  from 
the  payment  of  some  other  tax  otherwise  necessary, 
cannot  be  considered  as  an  actual  loss  to  the  commu- 
nity. The  additional  price  paid  on  the  domestic  cloth 
is  equally  a  burden  on  the  consumer,  but  being  paid  not 
to  government  but  to  the  manufacturer  is  an  actual 
national  loss.  The  same  loss  is  incurred  in  the  manu- 
facture of  the  cloth  as  if  the  duty  had  not  been  laid  ; 
and  its  only  effect  is  to  transfer  that  loss  from  the  man- 
ufacturer to  the  consumer. 

The  duty  may  not  always  be  laid  so  as  to  be  nearly 
equal  to  the  difference  between  the  price  at  which  the 
domestic  manufacture  can  be  afforded  and  that  at  which 
a  similar  foreign  article  might  have  been  previously 
purchased. 

If  the  duty  is  much  less  than  that  difference,  it  is 
only  a  fiscal  measure,  and  does  not  enable  the  manufac- 
turer  to  carry  on  his  business.     All  the  cloth  of  the 


FREE  TRADE  MEMORIAL.  123 

quality  on  which  the  duty  is  laid  will  still  be  imported 
from  abroad,  but  the  additional  price  at  which  it  is  sold 
is  only  a  tax  on  the  consumer,  and  being  paid  to  the 
Government  does  not  amount  to  a  national  loss. 

If  the  duty  is  much  greater  than  that  difference,  as 
the  domestic  article  can  be  manufactured  at  a  price  less 
than  the  aggregate '  of  the  duty  and  of  the  price  at 
which  the  same  foreign  article  might  have  been  pur- 
chased previous  to  the  duty,  the  price  will  probably  be 
reduced  by  domestic  competition  to  that  at  which  it  can 
be  manufactured  and  afforded  with  the  ordinary  rate  of 
profit.  The  duty  becomes  then  prohibitory  ;  the  whole 
amount  consumed  is  of  domestic  manufacture ;  the  con- 
sumer still  pays  the  whole  amount  of  the  difference 
between  that  at  which  that  manufacture  can  be  afforded 
and  that  at  which  the  similar  foreign  article  might  have 
been  previously  purchased,  and  as  no  portion  is  paid 
into  the  public  Treasury,  the  whole  of  that  amount  is  a 
public  loss. 

In  every  case  the  difference  between  the  former  price 
and  that  at  which  the  domestic  manufacture  can  be 
sold  with  a  reasonable  profit  is  to  the  whole  extent  of 
that  manufacture  a  loss  to  the  community.  That  differ- 
ence is  equal,  or  nearly  equal,  on  each  yard  of  cloth,  to 
the  duty  laid  on  a  yard  of  the  similar  foreign  article, 
whenever  that  duty  is  not  too  high  to  prevent  partial 
foreign  importations  :  it  is  less  per  yard  than  the  duty, 
when  this  is  higher  than  is  necessary  for  the  encour- 
agement of  the  domestic  manufacture,  and  becomes  pro- 
hibitory ;  but  in  this  case,  the  whole  amount  consumed 
being  of  domestic  manufacture,  the  aggregate  public 
loss  is  greater  than  when  the  duty  admitted  is  of  foreign 
competition. 

It  may  be  urged  that  these  evils  are  compensated  by 
extraneous  advantages  which  may  accrue  to  the  country 
from  the  establishment  of  manufactures  ;  and  as  those 


124  ALBERT  GALLATIN. 

cannot  be  indefinite,  they  shonld  be  compared  with  the 
national  loss  which  necessarily  flows  from  the  restric- 
tive system.  It  may  also  be  asserted  that  the  price  at 
which  the  domestic  manufacture  may  be  afforded  will 
be  lessened  by  domestic  competition,  as  so  that  it  may 
not  ultimately  exceed  that  at  which  similar  foreign  arti- 
cles might  have  been  previously  purchased ;  and  that 
assertion  deserves  serious  attention.  But  it  cannot  be 
denied  that  until  the  price  is  thus  reduced,  or  unless 
there  are  extraneous  advantages  which  compensate  the 
difference  between  the  former  and  the  new  artificial 
price,  that  difference  is  in  the  first  instance  a  national 
loss,  arising  from  what  is  for  the  time  a  misapplication 
of  capital  and  labor.  For,  in  order  to  disprove  that 
position,  it  would  be  necessary  to  show  that  there  is  in 
the  country  a  surplus  amount  of  capital  and  labor  which 
cannot  be  more  profitably  employed. 

That  there  is  a  sufficient  amount  of  capital  and  labor 
applicable  to  manufactures  without  withdrawing  any 
that  was  previously  actually  employed  in  agriculture, 
commerce,  or  mechanical  pursuits,  is  generally  true. 
For  though  there  may  be  in  certain  parts  of  the  coun- 
try instances  of  that  kind,  yet  considered  as  a  whole, 
there  is  not,  notwithstanding  the  numerou.s  recent  man- 
ufacturing establishments,  any  diminution  in  the  agri- 
culture, foreign  commerce,  or  domestic  exports  of  the 
country.  Nor  is  it  necessary,  in  order  to  explain  this 
state  of  things,  to  recur  either  to  an  imaginary  dormant 
capital,  or  to  a  pretended  creation  of  capitals  by  banks, 
or  by  legislative  acts. 

The  five  periodical  enumerations  of  the  inhabitants 
of  the  United  States  show  a  uniform,  and  not  yet  di- 
minished increase  of  population  at  the  rate  of  near 
3%  a  year.  That  population  which,  eighteen  months 
ago,  amounted  according  to  the  census  to  12,856,000, 
exceeds   at  this   time  13,400,000   souls.     The   increase 


FREE  TRADE  MEMORIAL.  125 

is  already  at  the  rate  of  near  400,000  a  year.  Every 
year  adds  150,000  able-bodied  men  to  the  labor  of 
the  country.  The  whole  of  that  population  is  most 
enterprising  and  intelligent,  and  a  great  majority  en- 
gaged in  active  and  profitable  pursuits,  and  continuing 
to  make  large  annual  additions  to  the  capital  of  the 
country.  Their  energy  and  skill  more  than  compensate 
the  losses  arising  from  an  erroneous  course  of  policy, 
notwithstanding  which,  and  not  through  which,  the 
prosperity  of  the  country  is  rapidly  increasing.  This 
additional  capital  and  this  additional  labor  are  annually 
applied,  the  greater  part  to  agriculture,  the  necessary 
portion  to  commerce,  the  residue  to  mechanic  arts  and 
manufacturing  industry. 

But  the  whole  of  that  additional  capital  and  labor 
would,  if  there  was  no  legislative  interference,  be  em- 
ployed in  remunerating  pursuits  ;  and  it  is  not  true  that 
any  portion  must  necessarily  be  applied  to  those  par- 
ticular branches  which,  if  not  sustained  by  artificial 
means,  could  not,  it  is  asserted,  be  carried  on  at  all.  The 
duty  which  enables  the  manufacturer  of  commodities 
of  that  description  to  sell  his  eight  hundred  yards  of 
cloth  for  $1,000  instead  of  $800,  does  not  enable  him 
to  produce  one  thousand  yards  with  the  same  capital 
and  labor.  In  order  to  show  that  this  difference  of  two 
hundred  yards  or  dollars  is  not  in  the  first  instance  a 
national  loss,  it  must  be  demonstrated  that  the  capital 
and  labor  thus  employed  could  not  have  been  more 
advantageously  applied  in  any  other  branch  open  to 
American  industry  at  the  very  time  when,  if  applied 
to  any  unprotected  branch  whatever,  no  such  loss  was 
experienced. 

A  state  of  society  may  indeed  exist,  where,  owing 
either  to  a  superabundant  j)opulation,  to  over  taxation, 
to  a  great  inequality  in  the  distribution  of  wealth  or 
in  the  means  of  acquiring  it,  or  to  any  other  natural  or 


126  ALBERT  GALLATIN. 

artificial  cause,  a  portion  of  an  industrious  population 
may  occasionally  or  at  all  times  be  in  actual  want  of 
employment.  Of  a  country  thus  situated,  it  may  be 
said  that  it  contains  a  capability  of  labor  beyond  that 
actually  put  forth.  The  symptoms  of  such  a  state  of 
things  are  sufficiently  visible ;  workmen  discharged  or 
with  reduced  wages,  asking  employment  and  food,  and 
poor  rates  given  to  able-bodied  men  as  a  supplement  to 
their  insufficient  salary.  We  may  understand  how  in 
that  case  a  new  manufacture  —  some  new  channels 
opened  to  the  national  industry  —  would,  by  giving  em- 
ployment to  the  laborer,  bring  into  action  an  additional 
amount  of  labor. 

There  may  also  be  countries  favored  with  a  more 
genial  climate,  where  the  wants  being  few,  and  the  ab- 
solute necessary  means  of  subsistence  earned  with  less 
labor,  long  continued  misgovernment  has  created  deeply 
rooted  habits  of  indolence.  And  such  countries  may 
also  be  said  to  have  a  dormant  power  of  labor  which  a 
free  and  wise  government  might  stimulate  and  put  in 
motion. 

The  situation  of  the  United  States  is  the  very  reverse 
in  both  respects.  The  existing  rates  of  wages  stimulate 
industry  with  a  greater  force  than  in  any  other  coun- 
try ;  and,  as  a  natural  consequence,  there  is  not  on  the 
face  of  the  globe  a  nation  encumbered  with  less  indo- 
lence or  idleness  ;  a  population  more  active,  industrious, 
and,  we  believe,  more  productive.  This  will  continue 
"  so  long  as  the  cheapness  of  unimproved  land  shall 
offer  a  certain  employment  to  labor,  and  so  long  as  the 
constitution  remains  free  as  it  is."  If  the  restriction- 
ists  can  find  a  more  powerful  cause,  some  more  efficient 
means  to  stimulate  labor,  and  render  American  industry 
more  productive  and  profitable,  it  will  be  a  great  and 
glorious  discovery.  For  if  it  may  perhaps  be  admitted 
that  the  national  progress  in  acquiring  wealth  may  be 


FREE  TRADE  MEMORIAL.  127 

tested  by  the  general  rate  of  profits,  there  can  be  no 
doubt,  and  the  most  conspicuous  ilkistration  of  the  fact 
is  found  in  the  situation  of  the  United  States  compared 
with  that  of  every  other  country,  tliat  the  greatest  mass 
of  comfort  and  happiness  is  always  found  where  the 
remuneration  of  labor  is  the  highest.  Should  this 
prove  to  be  one  of  the  obstacles  to  the  establishment  of 
some  manufactures,  we  nevertheless  pray  that  it  may 
long  so  continue. 

It  is  impossible  that  the  state  of  tlie  country  should 
have  been  such  as  that  its  capital  and  labor  could  not 
have  been  more  advantageously  applied  than  to  branches 
of  industry  which,  left  to  themselves,  w^ere  attended 
with  actual  loss,  without  a  corresponding  great  and 
sensible  diminution  in  the  demand  for  capital  and  the 
wages  of  labor,  neither  of  which  has  been  felt.  So  long 
as  those  wages  suffer  no  diminution,  and  so  long  as 
those  employed  in  commercial  and  even  agricultural 
pursuits  continue  to  borrow  large  capitals  at  the  rate  of 
6%  a  year,  it  is  clear  proof  tliat  those  pursuits  afford 
profits  at  least  equal  to  that  rate  of  interest,  and  that 
an  application  of  capital  and  labor  to  the  production  of 
objects  on  which,  if  not  artificially  protected,  a  loss  is 
experienced,  is  not  at  all  necessary. 

That  1)7  multi])lying  in  any  country  the  channels  of 
domestic  industry,  a  greater  scope  is  given  to  its  appli- 
cation, a  market  more  diversified  and  less  liable  to  be 
glutted  procured  to  its  products,  and  a  larger  field 
opened  to  every  species  of  skill  and  talent,  is  undubi- 
tably  true.  But  to  direct  that  industry  to  unprofitable 
])ursuits  which  cannot  be  sustained  without  exaggerated 
duties  paid  by  tlie  consumer,  and  a  corresponding  na- 
tional loss,  does  not  open  new  channels  of  productive 
industry,  but  only  diverts  it  from  profitable  to  improfit- 
able  pursuits  to  the  community.  It  is  truly  remarkable 
that  the  advocates  of  the  rc^strictive  system  should  \)ro- 


128  ALBERT  GALLATIN. 

tend  to  consider  your  memorialists  as  wild  theorists, 
when  there  cannot  be  a  plainer  matter  of  fact  than  that 
if  a  man  pays  two  dollars  more  for  his  coat,  his  plough, 
or  the  implements  of  his  trade,  it  is  a  loss  to  him,  which 
he  must  pay  out  of  the  proceeds  of  his  industry,  and 
that  the  aggregate  of  those  individual  losses  is  an  actual 
national  loss. 

If  there  are  any  extraneous  or  collateral  advantages 
arising  to  the  community  from  the  extraordinary  pro- 
tection given  to  certain  special  branches  of  industry, 
they  must  be  found  either  in  the  profits  of  those  em- 
ployed in  those  branches,  or  in  the  greater  productive- 
ness of  the  labor  employed,  or  in  the  indirect  impulse 
given  to  other  branches,  and  in  the  enhanced  value  of 
other  products  of  domestic  industry. 

It  must,  in  the  first  place,  be  observed  that  we  are 
now  examining  the  loss  of  the  community  arising  from 
the  difference  between  the  price  at  which  the  domestic 
commodity  can  be  aif  orded  and  that  at  which  the  similar 
foreign  article  might  have  been  obtained.  The  price  at 
which  the  domestic  commodity  may  be  afforded  is  the 
final  result  of  the  whole  growing  or  manufacturing  pro- 
cess ;  and  as  it  embraces  all  the  profits  made  and  the 
wages  earned,  it  necessarily  includes  every  extra  profit 
from  whatever  cause  arising,  and  particularly  that  which 
may  be  due  to  any  increase  of  the  wages  earned  by  labor 
or  to  any  diminution  of  expense  derived  from  any  new 
or  more  advantageous  application  of  labor.  It  cannot 
therefore  be  said  that  any  presumed  collateral  advan- 
tages derived  from  any  extra  profits  on  the  capital,  or 
from  any  greater  productiveness  of  the  labor  actually 
employed  in  the  manufacture  of  the  domestic  article,  in 
any  degree  compensate  the  loss  arising  from  the  differ- 
ence between  the  former  and  the  new  artificial  price. 

If,  however,  the  profits  of  the  manufacturers  are,  by 
reason  of  the  high   duties  laid  in  their  favor,  greater 


FREE  TRADE  MEMORIAL.  129 

than  the  average  profits  iu  other  pursuits,  it  is  a  simple 
transfer  to  them  of  the  consumer's  property,  a  flagrant 
injustice  which  should,  independent  of  any  considera- 
tion of  a  general  nature,  be  immediately  corrected  by  a 
sufficient  reduction  of  the  duty.  But  although  there 
are  exceptions,  perhaps  more  in  tiie  case  of  raw  materials 
than  in  that  of  manufactures,  it  is  believed  that  where 
there  is  no  monopoly  against  domestic  competition  this 
will  be  sufficient,  ultimately,  to  reduce  the  profits  of  any 
particular  pursuit  to  its  proportionate  rate,  as  compared 
according  to  its  nature  with  the  profits  of  other  branches 
of  domestic  industry. 

We  are  told  in  reference  to  the  labor  employed  that 
the  restrictive  system  is  intended  and  calculated  to 
bring  into  action  a  quantity  of  labor  beyond  what  was 
previously  actually  put  forth.  That  immediately  em- 
ployed in  the  protected  branches  is  shown  by  the  result 
to  be,  on  the  contrary,  generally  less  productive  than  if 
applied  to  other  pursuits.  Yet  there  is  an  exception 
which  in  some  branches  seems  to  alleviate  the  evil. 
The  female  labor  employed  in  the  cotton  and  woollen 
manufactures  appears  from  the  rate  of  their  wages  to 
be  more  productive  than  if  applied  to  the  ordinary  occu- 
pation of  women. 

It  may,  therefore,  be  alleged  that  the  fund  out  of 
which  they  were  previously  supported  (generally  the 
proceeds  of  the  industry  of  their  parents)  being  thus 
set  free,  a  greater  portion  may  be  accumulated  and 
annually  added  to  the  capital  or  wealth  of  the  country. 
Or  to  take  another  view  of  the  subject :  if  the  labor  of 
one  hundred  men  was  necessary  to  produce  a  given 
value  of  exchangeable  commodities,  and  if  that  of 
twenty  men  and  of  one  hundred  and  twenty  Avomen, 
whose  labor  was  not  previously  more  productive  than 
that  of  forty  men,  may,  in  a  certain  manufacture,  be 
substituted  to  that  of  the  hundred  men,  and  produce  an 


130  ALBERT  GALLATIN. 

cM]^ii:il  value,  an  additional  quantity  of  productive  labor, 
equal  to  that  of  forty  men,  is  put  in  motion  by  the 
manufacture.  This  additional  labor  may  seem  to  re- 
quire a  proportionate  additional  capital  to  be  rendered 
productive ;  but  whilst  there  remains  a  sufficient  quan- 
tity of  rich  uncultivated  land,,  there  never  can  be  any 
difficulty  in  finding  remunerating  employment  for  labor. 

The  actual  number  of  women  thus  employed  cannot 
be  ascertained  ;  but  this  is  less  important  for  the  pur- 
pose in  view  than  the  ratio  of  the  additional  labor  thus 
gained  by  the  country  to  the  value  of  the  products  of 
both  branches ;  and  of  this  an  approximate  estimate 
may  l)e  made.  Their  wages  vary  from  $2  to  $3  a  week  ; 
and  to  estimate  the  difference  between  this  and  what 
might  be  earned  in  their  usual  occupations  at  $1^  a 
week,  or  $78  a  year,  is  certainly  a  large  allowance.  It 
appears  from  an  authentic  statement  that  in  a  flourish- 
ing cotton  manufactory  at  Lowell,  Massachusetts,  where 
the  annual  sales  amount  to  $210,000,  there  are  twenty 
men  and  one  hundred  and  eighty  women  employed. 
The  surplus  product  obtained  by  the  labor  of  these,  be- 
yond what  it  would  otherwise  have  been,  amounts,  there- 
fore, to  $14,000,  or  to  Gl%  of  the  annual  amount  of 
sales.  The  ratio  as  deduced  in  the  saiue  manner  from 
the  minutes  of  evidence  taken  in  1828  by  the  Committee 
on  Manufactures  of  the  amount  of  the  annual  sales 
and  the  number  and  wages  of  women  employed  in  the 
Taft,  Shepherd,  Wolcott,  and  Pierce's  woollen  manufac- 
tories is  64  %  on  the  annual  sales.  It  does  not  appear, 
either  from  the  rate  of  wages,  or  from  any  other  circum- 
stance, that  the  labor  immediately  employed  in  any 
manufacture  is,  in  any  other  respect,  more  productive 
than  if  applied  to  other  pursuits. 

If  the  protecting  system  has  had  a  beneficial  effect 
on  agriculture  or  commerce,  it  must  be  in  reference 
either  to  the  raw  materials  of  domestic  growth  employed 


FREE  TRADE  MEMORIAL.  '        131 

in  the  manufactures,  or  to  the  supplies  for  which  they 
give  a  market,  or  to  the  transportation  of  both,  as  well 
as  of  the  manufactured  products. 

It  is  obvious  that  no  allowance  must  be  made,  in  this 
view  of  the  subject,  for  the  impulse  given  to  the  grow- 
ing of  wool,  hemp,  flax,  or  any  other  raw  material,  which 
is  itself  sustained  by  a  high  protecting  duty.  The  same 
reasoning  ap})lies  to  those  as  to  any  other  protected 
article,  whether  of  the  growth  or  manufacture  of  the 
country,  which,  since  it  requires  such  protection,  must 
be  a  losing  concern  if  left  to  itself.  If  otherwise,  the 
protection  is  useless,  and  the  additional  price  arising 
from  the  bounty  an  unjust  transfer  of  the  property  of 
one  to  another  class  of  citizens.  Biit  it  must,  on  the 
ctther  hand,  be  recollected  that  the  difference  of  price 
between  the  domestic  cloth,  for  instance,  and  the  similar 
foreign  article  free  of  duty,  or,  what  is  tantamount,  the 
national  loss  incurred  in  the  domestic  manufacture,  em- 
braces both  that  on  the  wool  or  raw  material  and  that 
on  the  maiuifacturing  process. 

It  is  otherwise  with  respect  to  cotton.  The  duty  on 
that  of  foreign  origin,  which  is  about  33 J  %  on  the  value, 
is  ])U rely  nominal.  This  is  always  true  in  regard  to  any 
article  of  domestic  growth  or  manufacture  which  is 
usually  and  extensively  exported.  Any  commodity 
which  can,  in  foreign  markets  Avhere  it  has  no  pro- 
tection, sustain  the  competition  of  every  similar  foreign 
article  will  sustain  it  on  still  better  terms  in  the  home 
market,  and  is  not  protected  by  the  duty,  but  by  its 
intrinsic  superior  cheapness  or  qiiality.  Whatever 
impulse  may  have  been  given  to  the  production  of 
American  cotton  by  the  domestic  manufactures  of  that 
material  is  therefore  a  clear  gain  to  the  community. 
This,  for  the  very  reason  that  the  amount  cannot  be 
calculated  with  precision,  has  undoubtedly  been  greatly 
exaggerated.     ]5ut  it  cannot  be  d()ul)trd  tliat  the  con- 


132  ALBERT  GALLATIN. 

sumption  of  cotton  goods  in  the  United  States  has,  to  a 
certain  extent,  been  increased  by  the  establishment  of 
the  domestic  manufacture,  and  that  the  fluctuations 
of  price  are  lessened  by  having  a  greater  number  of 
markets  (in  this  case  one  nearer,  and  so  considerable), 
even  though  the  aggregate  of  sales  was  not  materially 
increased. 

Your  memorialists  must,  at  the  same  time,  observe  that 
these  favorable  considerations  apply  to  that  of  the  pro- 
tected manufactures,  which,  owing  principally  to  its  suc- 
cess, receives  in  fact,  at  this  time,  the  least  protection 
from  the  restrictive  system.  Foreign  cotton  goods,  the 
prime  cost  of  which  exceeds  twenty-two  cents  (or,  accord- 
ing to  the  true  par  of  exchange,  about  eleven  pence  ster- 
ling) a  square  yard,  pay  at  this  time  less  than  the  average 
duty,  which  now  exceeds  40%.  When  that  average  duty 
shall,  by  the  reduction  of  the  revenue,  have  been  re- 
duced to  25%,  those  cotton  goods,  the  prime  cost  of  which 
is  less  than  thirty -five  and  more  than  about  fifteen  cents, 
would  alone  be  affected  by  a  reduction  to  that  rate  of 
the  duty  on  foreign  cotton  manufactures.  For  the  duty 
on  those,  the  prime  cost  of  which  is  no  more  than  fifteen 
cents,  is  purely  nominal ;  those  of  domestic  manufacture 
of  corresponding  prices  being  at  least  equal  in  (quality, 
and  in  fact  exported  to  a  considerable  amount. 

Manufactures  give  also  a  value  to  certain  raw  ma- 
terials which  had  little  or  none  before ;  iron  Avorks  to 
the  ore,  paper  mills  to  rags,  glass  works  to  ashes ;  but 
the  cost  of  extracting  or  producing  most  of  those  con- 
stitutes the  greater  part  of  the  price  ;  and  the  aggregate 
surplus  value  of  all  is  so  small,  as  compared  with  that 
of  the  manufactured  article,  that  it  is  hardly  worth 
consideration. 

But  it  is  principally  respecting  the  increased  con- 
sumption, by  the  protected  manufactures,  of  supplies  of 
domestic  origin  other  than  the  raw  materials,  and,  above 


FREE  TRADE  MEMORIAL.  133 

all,  of  breadstuffs  and  other  provisions,  that  the  most  ex- 
aggerated accounts  have  been  industriously  circulated. 
It  might  be  supposed,  from  the  language  held  on  that 
subject,  that  the  agricultural  interest  was  exclusively- 
indebted  for  its  prosperity  to  the  restrictive  system. 
We  are  told  of  the  "  invigorated  condition  of  our  agri- 
culture in  the  last  three  or  four  years,  during  which 
period  the  value  of  the  labor  of  the  farmer,  and  with  it 
the  value  of  his  land,  it  is  well  known,  has  risen  some 
20%  or  30%,"  and  that  "this  augmentation  in  the  value 
of  agricultural  labor  and  capital  can  be  ascribed  to  no 
other  cause  than  to  the  increase  of  the  manufacturing 
classes,  and  to  the  rapid  growth  of  our  home  market 
under  the  protecting  system." 

On  hearing  this,  and  also  that  what  was  equivalent  to 
one  million  of  barrels  of  breadstuffs  was  imported  every 
year  into  the  eastern  States,  we  sought  for  proofs,  and 
find  the  average  price  of  flour  at  Philadelphia  to  have 
been  for  the  eleven  years,  1820  to  1830,  — 

1820,  $4.72    1822,  $6.58    1825,  $5.10    1828,  $5.60 

1821,  4.78    1823,  6.82    1826,  4.65    1829,  6.-35 

1824,  5.62    1827,  5.23    1830,  4.98 


Average  4.75         6.34         4.99         5.64 

Average  for  the  eleven  years,  $5.49.  If  it  is  due  to 
the  protecting  system  that  the  average  of  the  last  three 
years,  as  compared  with  the  three  immediately  pre- 
ceding, rose  from  5%  to  5.64%,  to  what  cause  must  be 
ascribed  the  still  higher  average  of  6.34%  for  the  years 
1822  to  1824,  immediately  following  the  depressed  price 
of  4.75%  of  the  years  1820  to  1821,  and  before  the 
country  was  under  the  magic  influence  of  the  tariffs  of 
1824  and  1828  ?  Was  the  depression  to  the  average 
price  of  $5,  during  the  years  1825  to  1827,  the  result  of 
the  tariff  of  1824,  or  that  to  the  same  price,  in  1830,  of 
the  tariff  of  1828  ? 


134  ALBERT  GALLATIN. 

The  enlightened  advocates  of  the  protecting  system 
need  not  be  informed  that  all  those  fluctuations  are 
exclusively  due  to  the  foreign  demand ;  that  in  a  coun- 
try which  always  raises  what  is  the  equivalent  of  fifteen 
hundred  thousand  barrels  of  breadstuffs  beyond  its  own 
consumption,  the  price  depends  on  the  proportion  be- 
tween that  supply  and  the  foreign  demand;  and  that 
that  demand  will  continue  to  govern  the  price  of  the 
liome  market,  whatever  may  be  the  increase  of  the  do- 
mestic consumption,  so  long  as  such  an  excess  be^^ond 
that  consumption  shall  continue  to  be  raised.  If  there 
was  no  foreign  demand  for  that  surplus  (or  for  any  other 
article  which  is  now  extensively  exported),  either  the 
fpiantity  raised  must  be  diminished  in  that  proportion, 
or  the  price  would  fall  to  the  very  lowest  rate  at  which 
the  produce  caii  be  cultivated.  Such  has  been  the  in- 
variable result  in  every  part  of  the  country  too  distant 
from  the  seaports  to  participate  in  the  benefit  of  the 
foreign  market.  The  enhanced  price  of  breadstuffs  and 
other  exportable  articles,  beyond  that  minimum,  is 
almost  exclusively  due  to  the*  foreign  demand,  and  not 
in  any  perceptible  degree  to  the  increase  of  manu- 
factures. The  statement  of  })rices  exhibits  no  other 
than  those  ordinary  fluctuations  in  the  foreign  demand 
which  have  at  all  times  occurred,  and  does  not  afford 
the  slightest  proof  of  that  permanent  improvement  in 
the  value  of  agricultural  labor  ascribed  to  the  protecting 
system.  For  the  enhanced  price  which  the  farmer 
obtains  for  any  of  his  products  which  continue  to  be 
extensively  exported,  he  continues  to  be  solely  indebted 
to  the  foreign  market  and  to  commerce. 

ISTot  only  has  not  the  price  been  affected,  but  the 
absolute  quantity  of  breadstuffs  raised  in  the  United 
States  has  not  been  increased  one  single  bushel  by  the 
restrictive  system,  otherwise  than  by  the  inducement  it 
may  have  offered  to  some  skillful  artists  and  operatives 


FREE  TRADE  MEMORIAL.  135 

to  emigrate.  The  whole  quantity  raised  is  that  wanted 
for  home  consumption  and  exportation ;  that  wanted  for 
home  consumption  is  regulated  by  the  amount  of  popu- 
lation ;  and  to  this  the  protecting  system,  saving  a  few 
more  immigrants,  has  not  added  a  single  individual. 
The  uniform  rate  of  increase,  demonstrated  by  the  sev- 
eral enumerations,  proves,  beyond  controversy,  that  no 
general  sensible  change  has  been  produced  by  the  in- 
crease of  manufactures,  and  that  we  are  indebted  to  a 
far  more  powerful  cause  for  our  prosperity. 

The  answer  of  one  of  the  advocates  of  protecting 
duties  to  the  Committee  on  Manufactures,  respecting 
the  moral  and  pecuniary  condition  of  laborers,  is  equally 
applicable  to  the  unparalleled  growth  of  the  population 
of  the  United  States :  "  This  will  continue  to  be  the 
case  so  long  as  this  country  offers  to  labor  a  certain  em- 
ployment, in  the  purchase  of  unimproved  lands,  at  a 
low  price,  and  so  long  as  the  constitution  of  the  govern- 
ment remains  free  as  it  is."  These  are  the  bases  of  the 
true  American  system ;  of  that  system,  free  of  restric- 
tions, which,  permitting  every  man  to  pursue  those 
occupations  for  which  he  was  best  fitted,  had  in  less 
than  two  centuries  converted  the  wilderness  into  an 
earthly  paradise ;  and  out  of  a  few  persecuted  emigrants, 
had  created  a  prosperous,  happy,  and  powerful  nation. 
Under  the  auspices  of  that  system  of  freedom,  the 
American  people,  amidst  all  the  fluctuations  and  vicissi- 
tudes incident  to  human  affairs,  had  never  ceased  to 
make  the  most  rapid  progress  in  agriculture,  arts,  and 
commerce.  To  ascribe  that  unexampled  and  uninter- 
rupted prosperity,  which  even  legislative  errors  cannot 
arrest,  to  a  tariff  is  one  of  the  most  strange  dekisions 
by  which  intelligent  men  have  ever  suffered  themselves 
to  be  deceived. 

But  if  a  sober  investigation  of  facts  is  substituted  to 
those   exaggerated    and    untenable   assertions,   all   the 


13G  ALBERT  GALLATIN. 

benefit  conferred  by  manufactures  on  the  agricultural 
interest  at  large  will  be  found  to  consist  in  having 
probably  lessened,  to  some  extent,  the  number  of  those 
who  would  otherwise  have  followed  agricultural  pur- 
suits, and  thereby  prevented  the  production  of  a  greater 
(quantity  of  breadstuffs  and  other  provisions  than  might 
be  actually  wanted  for  home  consumption  and  profitable 
exportation.  The  effect  cannot  have  been  considerable. 
In  many  districts  there  is  a  sensible  diminution  of 
household  manufactures,  which  lessen  the  apparent  ad- 
vantage derived  from  the  employment,  in  manufacturing 
establishments,  of  female  labor.  And  your  memorialists 
have  no  doubt  that  the  greater  number  of  the  men 
engaged  in  the  unprofitable  branches  which  have  been 
artificially  fostered  would  have  followed  some  of  the 
other  mechanical  pursuits  which  require  no  special 
protection. 

Supposing,  however,  that  all  those  employed  in  the 
manufacturing  establishments  have  given  a  new  market 
to  the  wheat-growing  States  ;  what  does  this  amount  to, 
and  Avhat  is  the  benefit  to  the  agricultural  interest  ? 

Those  States  have  always  supplied  the  eastern  States 
with  wheat,  flour,  and  some  other  provisions ;  and  the 
question  is  not,  Avhat  is  the  amount  now,  bat  what  has 
been  the  increase  ?  The  home  consumers  of  the  flour 
not  used  by  the  farmers  themselves  consist  of  the 
inhabitants  of  all  the  cities,  towns,  and  villages  in  the 
United  States,  whether  commercial,  manufacturing,  or 
of  any  other  descrij^tion.  The  population  of  the  three 
great  manufacturing  eastern  States  —  Massachusetts, 
Rhode  Island,  and  Connecticut  —  amounted,  in  1790,  to 
679,968;  in  180U,  to  743,365;  in  1810,  to  811,113;  in 
1820,  to  882,110 ;  and  in  1830, 1,004,935  souls.  The  rate 
of  increase  during  the  three  first  periods  was  uniform, 
not  varying  more  than  from  8.7%  to  9.3%  for  each  ten 
years.     The  increase  from  1820  to  1830  has  been  at  the 


FREE  TRADE  MEMORIAL.  137 

rate  of  13.9%,  or  5%  more  than  the  average  rate  of 
increase  of  the  three  preceding  periods.  This  excess, 
which  amounts  to  50,000  souls,  is  all  that  can  possibly 
be  ascribed  to  manufactures.  Taking  even  the  whole 
increase  during  the  last  ten  years,  it  amounts  for  the 
three  States  to  less  than  123,000  souls,  not  one  half  of 
whom  are  consumers  of  flour,  or  of  any  other  imported 
provisions,  to  any  extent;  and  from  those  consumers, 
the  increase  of  Boston,  amouuting  almost  to  18,000 
souls,  and  of  several  other  commercial  and  not  manu- 
facturing seaports,  should  be  deducted.  Now  the  in- 
crease of  population  of  jSTew  York,  the  inhabitants  of 
which  are  all  consumers  of  flour,  for  the  last  ten  years 
exceeds  (including  Brooklyn)  84,000  souls.  There  can- 
not be  the  least  doubt  that  the  market  afforded  to 
the  agricultural  interest,  by  the  increased  population 
during  that  period,  of  the  commercial  and  other  non- 
manufacturing  towns  and  villages  of  the  United  States, 
is  far  more  extensive  than  that  derived  from  all  the 
manufacturing  establishments. 

But  there  is  a  still  more  precise  mode  of  ascertaining 
the  extent  to  which  they  have  promoted  the  agricultural 
interest  at  large.  Pursuing  the  process  adopted  in 
estimating  the  value  of  female  labor,  we  find  that,  in 
the  flourishing  Lowell  cotton  manufactory,  already 
alluded  to,  the  board  of  all  the  persons  employed,  at  the 
rate  of  $1.75  a  week  for  the  men,  and  of  $1.25  for  the 
women,  amounts  to  the  annual  sum  of  $13,500,  or  less 
than  6^%  on  $210,000,  the  annual  amount  of  sales. 
Mr.  Pierce  states  the  amount  consumed  by  persons  em- 
l)loyed  in  his  woollen  factory,  and  their  families,  exclu- 
sive of  $7,000  in  domestic  cotton  goods,  as  followeth  :  — 

Com,  flour,  rice,  sugar,  tobacco,  and  fish,  .         .     $7,500 

Other  domestic  provisioas  and  fuel,  .         .         .       5,000 

In   all   $12,500,    or   about    10%    on  his    annual   sales. 
The  average  ratio  of  the  board  of  all  the  persons  em- 


138  ALBERT  GALLATIN. 

ployed  in  the  Taft,  Shepherd,  and  Wolcott  factories  to 
the  annual  sales  is  H\%.  The  average  of  the  whole 
does  not  exceed  9%,  of  which  only  about  one  half  con- 
sists of  articles  imported  from  other  States.  But  the 
benefit  to  the  farmers  and  to  the  carriers  of  that  produce 
cannot  certainly  amount  to  20%  upon  it.  The  profit  of 
the  agricultural  interest  derived  from  the  cotton  and 
Avoollen  manufacturing  establishments  cannot  therefore 
exceed,  at  most,  2%  on  the  annual  sales,  of  which  at 
least  one  half  must  be  allotted  to  the  farmers  in  the 
immediate  vicinity ;  and  the  residue  to  the  agricultural 
interest  at  large  of  the  United  States.  The  manufacture 
of  cast  and  bar  employs,  in  proportion  to  the  value  of 
the  product,  a  greater  number  of  persons.  Admitting, 
in  this  view  of  the  subject,  the  statement  of  the  manu- 
factures to  be  correct,  the  gross  amount  of  the  articles 
purchased  from  farmers  is  about  30%  of  the  whole  value 
of  the  product:  20%  profit  on  those  articles  by  the 
farmer  would  give  him  6%  on  the  annual  amount  of 
American  iron.  In  exchange,  he  pays  from  40%  to 
100%  more  for  that  than  he  would  for  foreign  iron, 
and,  in  this  case,  the  benefit  derived  is  confined  to  the 
immediate  vicinity  of  the  manufacture. 

Allowance  has  been  made  in  tliis  estimate  for  the 
profit  on  the  carriage  of  the  provisions  consumed  by 
the  manufacturing  establishments.  That  on  the  freight 
of  cotton  from  the  places  of  exportation  to  other  parts 
of  the  United  States  is  not  greater  than  if  it  had  been 
exported  to  Europe.  That  on  the  carriage  of  the  other 
raw  materials  forms  but  a  small  item.  The  profit  on  the 
coasting  or  inland  carriage  of  manufactured  articles  is 
the  same,  whether  they  are  of  domestic  or  foreign  origin. 
A  decrease  of  the  tonnage  employed  in  the  foreign 
trade  must  have  taken  place,  proportionate  to  that  of 
the  imports  excluded  by  the  tariff,  and  of  the  exports 
with  which  those  would  have  been  paid  for.     Any  in- 


FREE  TRADE  MEMORIAL.  139 

crease  which  may  have  taken  place  in  the  coasting  trade 
is  due  to  the  generally  increased  intercourse  and  com- 
merce between  the  several  parts  of  the  United  States, 
to  Avhich  the  increased  amount  of  protected  articles, 
with  the  exception  of  sugar,  can  have  contributed  but  a 
very  small  portion,  and  no  greater  than  would  have 
been  gained  on  the  transportation  of  the  same  amount 
which  otherwise  would  have  been  imported  fronr  abroad. 
There  are  no  data  from  which  the  increase  of  the  coast- 
ing trade  of  the  three  or  four  last,  as  compared  with 
that  of  the  preceding,  years  can  be  estimated.  The 
total  amount  of  enrolled  and  licensed  tonnage  of  the 
United  States  on  the  31st  of  December,  1828,  was  stated 
by  the  Treasury  at  928,772  tons.  But  this  was  cor- 
rected during  the  year  1829  by  striking  out  not  less 
than  358,136  tons  for  vessels  lost  or  condemned  in  pre- 
vious years,  and  not  before  entered  in  the  treasury 
books.  The  true  amount  at  the  end  of  the  year  1828 
was  therefore  only  570,636  tons,  including  about  24,000 
tons  of  steamboats  employed  on  the  lakes  and  inland 
rivers.  But  as  this  enormous  difference  is  the  result  of 
omissions  accumulated  during  a  series  of  years,  and  it 
is  not  stated  whether  a  similar  correction  ever  was 
made  before,  it  only  shows  that  the  statements  for  the 
preceding  years  are  all  erroneous,  and  that  there  are  no 
returns  published  by  which  to  ascertain  the  annual  pro- 
gressive increase  of  that  tonnage.  The  return  for  the 
year  1789  is  incomplete,  but  that  for  1790  is  for  the 
whole  year,  and  could  not  be  liable  to  any  accumulated 
errors.  The  only  fact,  therefore,  to  be  relied  upon  is, 
that  the  enrolled  and  licensed  tonnage  which  at  the  end 
of  the  year  1790  amounted  to  132,000  tons  had  at  the 
end  of  1828  increased  to  571,000,  and  at  the  end  of  1829 
to  610,000  tonsi.  This  increase  is  by  about  one  third 
greater  than  that  of  the  population,  and  is  accounted 
for,  partly  by  the  acquisition  of  Louisiana  and  Florida, 


140  ALBERT  GALLATIN. 

partly  by  the  vastly  increased  wealth  and  intercourse 
between  the  several  States. 

It  must  be  recollected  that  in  this  estimate  of  the 
advantages  arising  from  the  protecting  system,  those 
only  are  now  taken  into  consideration  which  accrue  to 
the  community  considered  as  a  whole,  and  that  such  as 
are  exclusively  enjoyed  by  any  distinct  class  of  society  or 
section  of  the  country  must,  in  this  view  of  the  subject, 
be  excluded.  The  bounty  which  that  system  gives  to 
the  growers  of  wool,  hemp,  and  flax  is  certainly  bene- 
ficial to  them ;  but  this  benefit  is  paid  for  and  falls  on 
the  community  at  large,  since  that  bounty  is  founded 
on  the  admitted  or  presumed  fact,  that  without  it  those 
commodities  would  not  afford  a  reasonable  profit  to  the 
grower. 

Yonr  memorialists  have  endeavored  to  enumerate, 
and  from  the  materials  accessible  to  them  to  estimate, 
as  far  as  practicable  those  general  advantages.  They 
are  aware  that  they  have  included  some  which  may  not 
be  thought  of  that  character,  in  accordance  to  the  most 
approved  principles  of  political  economy.  But  they 
must  repeat,  that  since  the  necessity  of  an  average  duty 
of  20%  to  25%  on  imports  is  admitted,  it  is  not  neces- 
sary for  them  to  discuss  abstract  questions,  but  only  to 
show  that  that  duty  is  amply  sufficient  to  cover  all  the 
general  advantages  which  may  possibly  be  ascribed  to 
the  restrictive  system  ;  and  admitting  all  those  of  a  de- 
batable nature,  they  have  rejected  only  those  which  are 
altogether  founded  on  error  and  delusion. 

It  has,  it  is  believed,  been  satisfactorily  shown  that 
the  difference  between  the  price  at  which  the  domestic 
commodity  protected  by  a  restrictive  duty  can  be  af- 
forded and  that  at  which  the  similar  foreign  article 
might  have  been  previously  purchased  is  a  national  loss, 
and  that  the  general  advantages  resulting  from  the  sys- 
tem which  may  in  part  compensate  for  that  loss  are 


FBEE  TRADE  MEMORIAL.  141 

to  be  found  in  the  increased  productiveness  of  the 
female  labor  employed  in  some  manufactures  ;  in  the 
nearer  and  perhaps  more  extensive  market  opened  to 
the  cotton  grower,  and  substituted  for  one  fifth  part,  as 
it  is  asserted,  of  his  crop  to  the  foreign  market ;  and  in 
the  very  inconsiderable  additional  home  market  afforded 
to  the  agricultural  interest  at  large. 

Those  advantages  have  in  every  instance  been  esti- 
mated at  a  higher  rate  than  what  your  memorialists 
consider  as  their  real  value.  They  are  not  found  united 
in  any  one  branch.  The  advantage  derived  from  a  new 
or  better  market  for  any  unprotected  raw  material  ap- 
plies only  to  the  cotton  manufacture  ;  that  ascribed  to 
the  employment  of  female  labor  is  confined  to  the  cotton 
and  woollen  ;  the  iron  has  none  but  a  greater  compara- 
tive consumption  of  agricultural  products.  They  do 
not  in  any  branch,  the  cotton  perhaps  excepted,  amount 
to  10%  of  the  value  of  the  annual  product  of  the  man- 
ufacture. But  making  the  most  ample  allowance  for 
errors  or  omissions,  it  is  utterly  impossible,  on  any 
rational  and  candid  calculation,  to  swell  their  aggregate 
value  to  an  amount  approaching  the  national  loss,  aris- 
ing from  a  difference  of  20%  between  the  respective 
prices  of  the  domestic  and  similar  foreign  commodity. 
The  duty  to  that  amount  is,  therefore,  more  than  amply 
sufticient  to  cover  all  those  presumed  advantages  ;  any 
higher  rate  in  favor  of  any  favored  commodity  is,  inde- 
pendent of  every  other  consideration,  a  certain  national 
loss  so  long  as  the  difference  of  price  corresponds  with 
the  rate  of  duty. 

The  next  question  to  be  examined  is,  therefore,  the 
effect  which  the  domestic  competition  arising  from  the 
tariff  is  said  to  have  on  prices.  But  your  memorialists 
must  first  take  notice  of  a  general  assertion  which, 
from  its  nature,  cannot  fail  to  have  made  an  erroneous 
impression  on  those  who  may  have  taken  only  a  super- 
ficial view  of  the  subject. 


142  ALBERT  GALLATIN. 

« 
Every  nation  takes  a  laudable  pride  in  all  that  con- 
tributes to  elevate  its  character ;  in  every  progress  made 
in  science,  letters,  arts,  wealth,  and  power ;  in  all  that 
constitutes  an  advanced  state  of  civilization.  To  substi- 
tute American  for  foreign  industry  whenever  the  sub- 
stitution is  advantageous  is  an  object  in  which  all 
cordially  unite.  But  whether  taking  advantage  of  that 
general  and  patriotic  feeling,  or  carried  away  by  it,  the 
advocates  of  restriction  contend  that  a  trade  in  foreign 
commodities  which,  without  regard  to  price,  might  be 
produced  by  domestic  industry  always  interferes  with 
that  industry.  They  denounce  and  would  proscribe 
that  trade  altogether,  and  thus  in  reality  inflict  the  most 
serious  injury  on  that  object  which  they  pretend  to 
protect.  Laws  which  do  not  trust  the  common  sense 
of  the  citizen,  which  do  not  permit  him  to  seek  what 
he  thinks  the  best  market  for  the  products  of  his  in- 
dustry, or  which  compel  him  to  receive  in  exchange 
for  these  a  less  quantity  of  the  objects  he  wants  than 
without  those  laws  he  might  have  obtained,  are  evi- 
dently destructive  of  domestic  industry.  By  free  trade 
we  mean  that  trade  which  we  may  carry  free  of  any 
restrictions  imposed  by  our  own  government.  It  is 
synonymous  with  free  industry,  and  it  is  only  because, 
and  as  far  as,  it  promotes  domestic  industry  that  we 
object  to  those  restrictions.  When,  in  order  to  justify 
that  system,  it, is  said  that  nations  are  adversary  to  each 
other,  and  that  a  free  trade  between  them  would  contra- 
vene the  arrangements  of  Providence ;  when  it  seems  to 
be  forgotten  that  it  is  commerce  which  unites  the  several 
nations  of  the  civilized  world,  and  that  next  to  Christian- 
ity it  is  principally  to  commerce  that  we  are  indebted 
for  modern  civilization,  we  can  but  lament  the  extremes 
to  which  enlightened,  patriotic,  and  philanthropic  men 
may  be  carried  by  adhering  to  a  favorite  theory  and  los- 
ing siglit  of  eve/y  other  consideration. 


FEEE  TRADE  MEMORIAL.  143 

Foreign  commerce  or  the  exchange  of  domestic  for 
foreign  commodities  is  of  the  same  nature,  and  founded 
on  the  same  principle,  as  commerce  between  different 
parts  of  the  same  country  or  that  between  individuals 
of  the  same  district  of  country.  Every  individual,  dis- 
trict of  country,  and  country  acquires  wealth  in  propor- 
tion as,  with  the  same  capital  and  labor,  the  greatest 
quantity  or  exchangeable  value  of  commodities  is  pro- 
duced. Whence  inevitably  follows,  in  every  case,  the 
mutual  advantage  of  exchanging  articles  produced 
cheaper  by  one  individual  for  such  as  are  produced 
cheaper  by  another,  or  of  exchanging  articles  produced 
cheaper  at  home  than  abroad  for  those  which  may  be 
produced  cheaper  abroad  than  at  home.  The  division 
of  labor  which  increases  the  skill  of  every  individual  in 
his  particular  branch  is  the  foundation  of  the  commerce 
or  mutual  exchange  of  commodities  between  individuals 
living  in  the  same  vicinity.  That  between  different 
parts  of  an  extensive  country  or  between  different  coun- 
tries has  its  origin  in  the  difference  of  climate,  of  capi- 
tal, of  the  density  or  nature  of  the  population,  and  of 
long-acquired  habits  and  corresponding  skill  in  particu- 
lar branches  of  industry.  The  causes  which  give  rise 
to  commerce,  as  well  as  its  advantages  or  presumed  in- 
conveniences, are  precisely  the  same,  whether  that  com- 
merce is  carried  between  different  nations  or  between 
different  parts  of  the  same  country.  The  misapplica- 
tion of  capital  and  labor  has  the  same  effect,  whatever 
may  be  the  cause  which  enables  an  individual  or  a  na- 
tion to  produce  a  certain  commodity  with  less  capital 
and  labor,  and  to  sell-  it  at  a  lower  price  than  another 
individual  or  another  nation. 

Those  truths  are  too  obvious  to  be  denied  in  direct 
terms,  but  they  are  disregarded  ;  and  several  allegations 
are  made,  tending  to  show  that  an  unrestricted  inter- 
course between  two  nations  is  fatal  to  one  or  ruinous  to 


144  ALBERT  GALLATIN. 

both.  1.  We  have  not  been  fortimate  enough  to  dis- 
cover on  what  principle  or  by  what  fact  it  can  be  proved 
that  such  intercourse  "  reduces  the  hibor  of  one  to  the 
same  scale  of  compensation  with  the  labor  of  the  other, 
to  the  great  injury  of  that  nation  whose  labor  stood 
highest  on  the  scale." 

Wages  are  one  of  the  elements  of  the  price  of  com- 
modities ;  and  if  higher  in  a  country  which  neverthe- 
less affords  certain  commodities  at  a  less  price  than  the 
country  where  the  wages  are  lower,  there  must  be  a 
difference  in  climate,  soil,  skill,  or  some  other  circum- 
stance which  produces  that  result.  But  in  each  country 
the  price  of  labor  is  determined  either  by  its  produc- 
tiveness or  by  the  proportion  between  demand  and 
supply  in  that  country,  and  in  no  manner  whatever  by 
what  may  be  that  productiveness  or  that  proportion  in 
any  other  country,  whether  there  is  or  is  not  an  inter- 
course between  the  two  countries.  We  have  heard  that 
Irish  laborers,  flocking  in  great  numbers  to  England  and 
Scotland,  have  by  deranging  the  existing  proportion  be- 
tween demand  and  supply,  and  by  the  low  rate  of  wages 
to  which  they  were  used,  lowered  in  certain  seasons 
the  price  of  labor  in  those  two  countries ;  but  so  long 
as  they  remained  at  home  and  did  not,  by  transferring 
their  labor  to  the  spot,  interfere  with  that  of  Eng- 
land, the  long-continued  intercourse  between  the  two 
countries  never  had  the  slightest  effect  on  the  price  of 
English  labor,  which,  varying  according  to  circumstances 
exclusively  belonging  to  England,  has  never  been  re- 
duced to  the  miserable  pittance  that  hardly  sustains, 
without  remunerating,  the  Irish  laborer.  This  is  uni- 
versally true  with  respect  to  every  country ;  the  price 
of  labor  is  in  each  regulated  exclusively  by  the  respec- 
tive proportion  of  supply  and  demand  and  the  state 
of  society.  After  two  centuries  of  free  commerce  with 
Great  Britain,  and  fifty  years  of  a  similar  intercourse 


FBEE  TRADE  MEMORIAL.  145 

■with  the  rest  of  the  world,  the  price  of  labor  continues 
without  alteration  to  be  higher  in  the  United  States 
than  in  England  or  any  other  country. 

2.  The  circumstances  which  may  tend  to  bring  forth 
more  labor  in  the  application  of  capital  to  certain 
domestic  manufactures  than  in  that  of  the  same  capital 
to  other  pursuits  have  already  been  adverted  to  ;  at 
the  same  time  that  it  has  been  shown  that  the  labor 
employed  in  highly  protected  manufactures  was  never- 
theless less  productive  than  if  applied  to  other  branches 
of  industry.  But  it  is  asserted,  and  the  general  im- 
pression intended  to  be  made  is,  that  because  foreign 
trade  puts  in  motion  foreign,  this  is  done  at  the  ex- 
pense of  American  industry,  and  that,  therefore,  by 
prescribing  the  first  this  is  necessarily  encouraged. 
This  would  be  true  if  foreign  merchandise  or  any  part 
of  the  foreign  imports  was  bestowed  gratuitously  on 
the  United  States,  in  which  case  the  Americans  might 
enjoy  the  gift  without  giving  any  labor  in  return ;  but 
as  every  article  imported  must  be  purchased  and  cannot 
be  paid  for  by  any  possible  means  other  than  the  pro- 
duct of  American  industry,  it  necessarily  follows  that, 
whatever  may  be  the  amount  of  imports  and  of  foreign 
industry  by  which  they  may  have  been  produced,  an 
equal  value  of  American  products  and  an  equal  amount 
of  corresponding  American  industry  is  employed  by  the 
foreign  trade.  When  a  domestic  manufacture  equally 
productive  as  any  other  pursuit  is  substituted  to  the 
foreign  articles,  it  puts  in  motion  precisely  the  same 
quantity  of  labor,  the  same  amount  of  American  indus- 
try, neither  more  nor  less  than  that  which  was  employed 
in  producing  the  articles  with  which  the  foreign  article 
was  previously  purchased  ;  the  difference  consists  only 
in  the  respective  degree  of  productiveness.  The  change 
is  advantageous  or  injurious  to  the  country,  as  the  do- 
mestic manufacture  may  be  more  or  less  productive  than 


146  ALBERT  GALLATIN. 

other  pursuits  to  whieli  the  same  capital  and  labor 
might  have  been  applied.  The  error  of  the  restriction- 
ists  consists  in  not  perceiving  that  the  foreign  trade 
promotes  tAvo  equal  amounts  of  foreign  and  domestic 
industry,  and  in  supposing  that  the  American  industry, 
which  in  the  establishment  of  a  new  manufacture  is 
substituted  to  the  foreign  industry,  is  an  addition  to, 
instead  of  being  a  deduction  from,  the  American  indus- 
try Avhich  was  or  might  have  been  otherwise  employed. 
It  is  obvious  that  a  certain  amount  of  American  indus- 
try which  was  or  might  have  been  employed  in  pro- 
ducing $1,000,000  worth  of  articles  intended  for  expor- 
tation and  to  be  exchanged  for  an  equal  value  of  foreign 
goods,  cannot,  if  employed  in  a  domestic  manufacture 
of  goods  of  similar  nature,  be  any  longer  employed  in 
producing  the  exportable  articles  ;  and  the  only  ques- 
tion is,  whether  that  amount  of  industry  is  more  or  less 
profitably  employed  in  its  new  than  in  its  former  em- 
ployment. 

3.  Since  the  foreign  imports  must  always  be  paid  for 
with  the  products  of  American  industry,  there  must 
always  be  a  tendency  in  foreign  trade  to  equalize  the 
respective  value  of  the  imports  and  exports.  Though 
varying  from  year  to  year,  any  debt  incurred  must 
ultimately  be  paid  out  of  tlie  same  fund.  The  imports 
of  the  United  States  during  the  ten  years,  1821  to  1830, 
have  amounted  according  to  the  official  accounts  to 
$798,630,000,  and  the  exports  to  $764,803,000.  If  the 
amount  of  bullion  and  specie  imported  and  exported  is 
deducted,  the  annual  average  of  imports  was  $72,948,000, 
and  that  of  exports  $69,327,000.  The  annual  average 
of  exports  of  domestic  produce  was  $53,221,000.  If  the 
re-exportations  of  foreign  merchandise,  valued  at  the 
same  price  as  that  of  importation,  are  deducted  from 
the  imports,  and  about  $20,000,000  added  to  these,  on 
account  of  the  difference  between  the   rate   at  which 


FREE  TRADE  MEMORIAL.  147 

British  goods  are  valued  by  law  and  that  of  the  ex- 
change between  the  two  countries,  the  annual  average 
of  the  foreign  articles  consumed  in  the  United  States 
will  be  found  to  be  about  $60,000,000,  which  is  an  ex- 
cess of  near  $7,000,000  beyond  the  exports  of  domestic 
produce.  According  to  the  official  returns  the  difference 
is  less  than  $3,500,000,  but  the  corrections  are  obvi- 
ously necessary.  The  amount  of  the  earnings  of  Amer- 
ican industry  by  sea,  Avhich  cannot  appear  in  the  state- 
ment of  exports,  must  be  added  to  these,  since  they 
equally  contribute  to  the  payment  of  the  imports. 
Those  arising  from  the  fish  which  from  the  banks  is 
carried  directly  to  foreign  ports  ;  of  the  whale  and  sper- 
maceti oil,  sold  by  the  fishing  vessels  in  South  America ; 
of  the  furs  collected  on  the  northwest  coast  and  sold  in 
China ;  and  of  the  freights  on  the  carrying  trade,  that 
is  to  say,  on  voyages  from  a  foreign  to  another  foreign 
port,  cannot  be  estimated.  But  the  freight  on  the 
$68,000,000  of  domestic  and  foreign  articles  annually 
exported  from  the  United  States,  calculated  on  the 
average  rates  according  to  the  nature  of  the  merchan- 
dise and  to  the  ports  of  destination,  exceeds  $11,000,000, 
of  which  about  $9,000,000  are  earned  by  the  American 
navigation.  This  result,  whilst  it  illustrates  the  invari- 
able correspondence  between  the  value  of  the  imports 
and  that  of  the  exports,  shows  also  that  so  far  from 
having  been  inundated  during  that  period  with  foreign 
merchandise  beyond  the  means  of  payment,  the  amount 
of  exports,  including  freight  and  those  items  which 
cannot  be  ascertained,  has  certainly  exceeded  that  of 
the  imports.  The  difference  has  either  been  received 
in  precious  metals  or  applied  to  the  payment  of  a  debt 
previously  due  abroad,  and  it  is  probable  that  both 
have  taken  place.  Independent  of  private  remittances 
on  foreign  account,  the  amount  of  the  public  debt  re- 
imbursed to  foreigners  appears  to  have  exceeded  their 


148  ALBERT  GALLATIN. 

investments  in  other  American  stocks  ;  and  althougli, 
according  to  the  official  returns,  which  in  that  respect 
are  necessarily  defective,  the  amount  of  precious  met- 
als exported  would  appear  to  have  exceeded  by  near 
$2,400,000  that  imported  during  those  ten  years,  it  is 
ascertained  that  the  amount  of  specie  in  the  banks 
alone  on  the  1st  of  October,  1830,  exceeded  by  more 
than  $7,000,000  the  amount  at  the  end  of  the  year 
1819. 

But  though  equal  or  nearly  eq^^al  to  each  other  dur- 
ing a  period  of  several  years,  the  respective  amounts  of 
imports  and  exports  vary  considerably  from  year  to 
year.  Imports  of  any  commodity  which  greatly  exceed 
the  ordinary  consumption,  though  affording  a  temporary 
advantage  to  the  consumer,  are  equally  injurious  to  the 
American  manufacturer  and  regular  importer.  The  ex- 
ample of  England  shows  that  manufactures  are  not 
exempt  from  similar  fluctuations,  and  are  exposed  to 
the  evils  of  over-production,  as  foreign  trade  to  that  of 
excessive  importation.  This  partial  and  occasional  evil 
is  inseparable  from  foreign  commerce,  and  cannot  be 
prevented  unless  that  commerce  be  altogether  proscribed. 
So  long  as  the  protecting  duty  is  not  prohibitory,  and 
the  corresponding  foreign  article  is  not  entirely  ex- 
cluded, it  may  occasionally  be  imported  to  excess.  It 
matters  not  whether  the  imports  amount  to  $60,000,000, 
or  are  reduced  by  the  restrictive  system  to  $40,000,000. 
The  same  excess  beyond  the  actual  wants  of  the  coun- 
try will  in  either  case  occasionally  take  place  with 
respect  to  any  commodity,  the  whole  stock  of  which  on 
hand  happens  to  be  much  greater  than  the  existing  de- 
mand. But  much  more  has  been  ascribed  to  that  cause 
than  can  be  sustained  by  the  facts.  Whatever  may 
have  been  the  cai;se  of  the  fall  of  price  of  woollen 
goods  in  the  years  1826  to  1827,  as  compared  with 
preceding  years ;  whatever  may  have  been  the  reason 


FREE  TRADE  MEMORIAL.  149 

why  the  domestic  manufacture  was  more  profitable  be- 
fore than  after  the  tariff  of  1824,  it  appears  impossible 
that  either  result  can  have  been  due  to  excessive  impor- 
tations. The  average  annual  amount  of  foreign  woollen 
goods  of  every  description  consumed  in  the  United 
States,  amounted  for  the  years  1822,  1823  and  1824,  to 
$9,233,000,  and  for  the  three  following  years,  1825, 
1826  and  1827,  to  $9,045,000.  The  principal  branch  of 
the  American  manufacture  consisted  of  cloths  and  cassi- 
meres.  The  value  of  the  corresponding  foreign  goods 
consumed  in  the  United  States  during  the  nine  years, 
1822  to  1830,  was:  — 

In  1822,  $8,342,000  182,5,  $4,900,000  1828,  $4,207,000 

1823,  .5,215,000  1826,   4,286,000  1829,    3,483,000 

1824,  4,643,000  1827,    4,118,000  1830,   2,9<34,000 

It  is  therefore  clear  that  even  the  somewhat  greater 
importation  of  1825  could  not  have  a  greater  effect  on 
the  prices  of  1826  and  1827  than  that  of  1823  on  the 
prices  of  1824  and  1825.  Yet  to  the  representations 
made  at  the  time  on  that  subject  we  are  indebted  for 
the  outrageous  woollen  tariff  of  1828.  As  the  real  evil 
complained  of  arises  from  over-trading,  and  may  ulti- 
mately be  traced  to  abuse  of  credit,  it  would  seem  that 
the  most  natural,  and  the  only  remedy  which  the  parties 
interested  may  have  a  right  to  claim,  is  that  the  legisla- 
ture should  cease  to  stimulate  the  importations  at  least 
of  the  articles  most  generally  imported  on  foreign  ac- 
count by  the  credit  now  allowed  for  the  payment  of 
duties.  The  foreign  manufacturer  who  sends  goods  on 
his  own  account  not  in  proportion  to  the  wants  of  the 
country  but  to  his  own,  who  is  willing  to  run  the  risk  of 
selling  at  a  loss  and  on  credit  the  merchandise  with 
which  he  is  encumbered,  would  be  deterred  from  send- 
ing it  to  America  if  he  was  compelled,  before  he  made 
any  sale,  to  advance  in  money  25%  on  the  value  of  that 


150  ALBERT  GALLATIN. 

merchandise.  According  to  tlie  present  system,  if  he 
sells  woollen  goods  for  cash,  he  receives  as  a  loan  for 
ten  months  without  interest  a  sum  equal  to  at  least  one 
half  of  their  prime  cost,  which  enables  him  to  continue 
to  undersell  the  manufacturer. 

4.  The  laws  of  foreign  nations  which  prohibit  or  re- 
strain the  sale  of  the  products  of  American  industry 
operate  precisely  in  the  same  manner  as  any  natural 
cause  which  confines  the  market  of  those  products 
within  certain  limits.  By  lessening  the  amount  of  the 
exports  or  of  the  means  of  paying  for  foreign  products, 
the  restrictive  laws  enacted  by  any  foreign  nation  lessen 
in  the  same  proportion,  not  necessarily  the  imports  from 
that  nation,  but  the  gross  amount  of  the  imports  of 
the  United  States.  No  legislative  measure  is  reqiusite 
on  their  part  in  order  to  avert  the  imaginary  evil  of  an 
excess  of  imports  over  exports.  The  diminution  of  the 
imports  is  a  natural  and  necessary  consequence  of 
the  diminution  of  exports.  Unless  foreign  commerce  be 
considered  as  a  positive  evil,  which  must  at  all  events 
be  annihilated,  there  is  no  occasion  for  passing  retalia- 
tory laws  which,  by  still  more  diminishing  the  imports, 
would  necessarily  have  the  same  effect  on  the  exports, 
lietaliatory  laws  that  had  that  effect  would  only  aggra- 
vate the  evil,  if  the  restrictions  imposed  by  the  foreign 
laws  on  American  products  are  admitted  to  be  an  evil. 
They  would  also  be  injurious  if,  by  being  applied  par- 
ticularly to  those  nations  which  had  imposed  the  re- 
strictions, they  compelled  Americans  to  purchase  else- 
where the  commodities  which  they  want,  and  might 
have  purchased  cheaper  from  those  nations.  The  whole 
amount  of  imports  equalizes  itself  with  the  whole  amount 
of  exports.  It  is  not  at  all  necessary  that  this  equality 
should  exist ;  it  never  does  exist  in  the  trade  of  any 
country  with  every  other  country.  Every  one  purchases 
what  it  does  want  from  that  country  which  affords  it 


FREE  TRADE  MEMORIAL.  151 

on  the  cheapest  terms,  and  sells  its  products  to  those 
countries  by  which  they  are  wanted  and  which  give  the 
highest  price. 

The  most  zealous  advocates  of  the  protecting  system 
do  not  pretend  that  their  object  is  to  lessen  the  amount 
of  the  American  products  which,  notwithstanding  the 
restrictive  laws  of  other  nations,  still  find  a  market 
abroad.  They  do  not  say  that  the  cotton  of  the  South, 
and  the  surplus  of  the  wheat  and  other  provisions  of 
the  middle  States  beyond  what  is  wanted  for  home  con- 
sumption shall  not  be  exported.  They  intend  to  give 
an  additional  and  nearer  market  to  the  cotton  and  wheat 
grower,  but  not  to  deprive  them  of  the  foreign  market 
which  is  still  open  to  them  ;  to  supply  growing  wants 
for  which  the  lessened  exports  can  no  longer  pay,  and 
not  to  increase  those  wants  by  preventing  foreign  na- 
tions from  paying  for  the  American  products  which 
they  still  wish  to  purchase.  The  restrictions  imposed 
by  foreign  nations  do  not  afford  a  single  reason,  though 
they  may  serve  as  a  pretense  for  the  adoption  of  re- 
strictive measures  on  the  part  of  the  United  States, 
which  would  not  equally  apply  if  the  exports  were 
reduced  by  a  natural  cause.  The  question  still  resolves 
itself  into  that  of  public  utility,  and  whether  measures 
intended  to  promote  American  industry  fulfill  that  ob- 
ject. If,  on  the  contrary,  it  is  made  less  productive  by 
the  artificial  direction  given  to  it  than  if  left  to  itself, 
the  fact  that  foreign  nations  have  imposed  restrictions 
injurious  to  the  foreign  trade  of  the  United  States  does 
not  in  the  slightest  degree  change  the  state  of  the  ques- 
tion, and  is  no  reason  whatever  why  a  policy  injurious 
to  America  should  be  adopted. 

This  is  so  true  that,  whatever  their  language  may 
have  been,  the  restrictionists  have  acted  on  that  princi- 
ple. The  regulations  of  France  respecting  breadstuffs 
and  tobacco  are  similar  to  those  of  England,  and  affect 


152  ALBERT  GALLATIN. 

the  interests  of  America  in  the  same  manner.  In  se- 
lecting for  protection  cotton  and  woollen  manufactures 
and  iron,  and  favoring  wines  and  foreign  silk  manufac- 
tures, the  sole  motive  was  the  belief  that  the  applica- 
tion of  American  industry  to  the  first  objects  would  be 
a  public  benefit,  and  that  it  was  not  at  this  time  adapted 
to  the  cultivation  of  wine  and  the  manufacture  of  silk 
stuffs.  The  protecting  duty  has  always  been  laid  in 
reference  to  those  branches  of  industry  which  were 
deemed  advantageous  and  not  at  all  to  the  restrictive 
measures  of  any  particular  foreign  nation. 

It  may  also  be  observed  that  the  State  which  prob- 
ably suffers  most  from  the  restrictions  of  foreign  na- 
tions on  its  products  asks  for  no  special  protection. 
Virginia,  is  a  great  wheat-growing  and  the  first  tobacco- 
growing  State.  The  foreign  restrictions  operate  in  a 
far  greater  degree  on  tobacco  than  on  any  other  article, 
without  excepting  breadstuffs.  There  can  be  no  doubt 
that  the  consumption  of  tobacco  in  France  and  England 
would  be  double  or  treble  of  what  it  now  is  were  a  free 
trade  in  that  article,  with  moderate  duties,  consistent 
with  their  policy.  The  change  in  that  of  France  has 
been  peculiarly  injurious  to  the  American  product. 
That  country  before  its  revolution  consumed  annually 
24,000,000  of  pounds  of  American  tobacco  instead  of 
6,000,000,  the  amount  of  its  present  consumption.  On 
the  other  hand,  the  effect  of  the  corn  laws  is  much 
less  than  seems  to  be  generally  apprehended.  America 
has  always  supplied  Great  Britain  with  corn  in  years  of 
great  scarcity,  and  rarely  at  other  times.  Canada  does 
it  now  at  all  times,  on  account  of  its  exemption  from 
laws  which  operate  on  the  corn  of  every  other  country. 
When  the  price  of  wheat  in  England  is  60s.  sterling  per 
quarter,  and  it  is  supposed  that  the  duty  of  20s:  is  a  re- 
striction on  the  sale  of  American  breadstuffs,  it  is  for- 
gotten that  the  (hity  is  the  very  reason  which  makes  the 


FREE  TRADE  MEMORIAL.  153 

price  so  high,  and  that  if  there  was  none,  the  deficiency 
in  quantity  would  in  common  years  be  supplied  by  the 
countries  on  the  Baltic,  where  it  is  one  third  cheaper 
than  in  the  United  States,  and  that  the  London  market 
would  not  be  much  better  than  that  of  Amsterdam  now 
is. 

There  is  an  exception  to  the  general  principle.  Re- 
taliatory measures  may  be  resorted  to  with  more  or  less 
success,  according  to  circumstances,  and  as  they  may 
be  more  or  less  adapted  to  the  object  in  view,  for  the 
purpose  of  inducing  a  nation  to  alter  her  policy  and 
conduct.  In  that  case  such  measures  are  of  a  temporary 
nature,  and  a  discussion  of  their  propriety  is  foreign  to 
the  question  now  under  consideration.  Had  this  been 
the  motive  the  course  pursued  would  have  been  very 
different.  The  commercial  conventions  would,  accord- 
ing to  the  right  reserved,  have  been  abrogated,  and  the 
manufactures  of  the  countries  in  question  exclusively 
taxed  or  prohibited.  But  it  is  believed  that  the  advo- 
cates of  the  protecting  system  would  not  hesitate  to 
declare  that  it  is  in  itself  highly  advantageous,  and  to 
avow  that  unless  convinced  of  the  utility  of  a  modifi- 
cation, they  will  persevere  in  the  same  policy  even  if 
all  the  restrictions  of  foreign  nations  on  the  American 
trade  were  revoked. 

5.  When  the  general  prevalence  of  the  restrictive 
system  and  the  experience  of  other  nations  are  appealed 
to,  the  appeal  is  in  fact  only  made  to  the  result  of  that 
jiolicy  in  England.  For  it  is  in  England  alone  that  the 
prohibitory  system,  and  a  complete  success  in  establish- 
ing manufactures  generally  superior  in  cheapness  or 
quality,  are  found  united.  The  only  legitimate  infer- 
ence that  can  be  drawn  from  her  example  is  that  both 
may  subsist  together.  It  would  require  a  much  more 
minute  knowledge  of  the  origin  and  gradual  })rogress  of 
the  manufactures   in  tliat  country  than  any  man  does 


154  ALBERT  GALLATIN. 

possess  to  ascertain  whether,  in  wliat  branches,  and  how 
far  the  prohibitive  system  has  promoted  or  impeded 
that  progress.  But  if  that  system  was  the  principal 
cause  which  has  made  Great  Britain  the  first  manufac- 
turing country  of  the  workl  it  would  have  produced 
similar  effects  in  all  the  countries  where  it  was  adopted, 
as  well  as  in  all  the  parts  of  the  same  country,  whilst 
those  which  had  rejected  it  would  be  found  destitute  of 
manufactures. 

It  is  quite  true  that  the  restrictive  or  prohibitive 
system,  as  a  branch  of  that  of  monopolies,  is  of  ancient 
origin,  and  has  been  adopted  and  persevered  in  for  cen- 
turies, by  most  European  nations.  The  only  exceptions 
are  perhaps  to  be  found  in  Holland,  which,  from  her 
situation  and  exclusive  attention  to  commerce,  followed 
the  opposite  course,  and  in  those  countries  subdivided 
into  states  or  communities  which,  like  the  United  States 
before  the  adoption  of  the  present  Government,  could 
not  unite  in  a  general  system.  The  first  obvious  re- 
flection is,  why  the  result  has  been  so  different  in 
different  countries  ?  The  system  appears  to  have  been 
early  adopted  in  Spain.  There  is  hardly  a  treaty  con- 
cluded during  the  seventeenth  century  between  that 
country  and  England,  in  which  there  is  not  a  clause  for 
the  reduction  in  her  favor  of  the  exorbitant  duties  laid 
by  Spain  on  certain  manufactures.  We  need  not  state 
what  is  the  situation  of  that  country  in  that  respect. 
Though  of  much  more  ancient  origin,  it  is  admitted  that 
the  system  has  rigorously  been  adhered  to  in  France, 
from  the  time  of  Colbert  to  this  moment,  with  the  single 
exception  of  the  few  years  which  intervened  between 
the  treaty  of  commerce  of  1786  with  England,  and  the 
wars  of  the  French  revolution.  France  continues  to 
enjoy  the  same  superiority,  even  over  England,  in  the 
silk  manufacture,  which  she  already  had  in  the  time  of 
Colbert ;  but  she  is  yet  unable  to  compete  with  her  in 


FREE  TRADE  MEMORIAL.  155 

most  other  branches.  This  is  evident  from  the  state- 
ments of  importations  into  the  United  States,  which 
afford  the  best  criterion  of  tlie  mannfactures  in  which 
each  nation  may  have  a  real  superiority.  From  France 
we  import  silks,  objects  of  taste,  and  fancy  articles,  but 
few  or  no  woollens,  cottons,  linens,  cutlery,  or  manu- 
factures of  leather.  And,  as  pointing  out  the  true  cause 
of  success,  it  may  be  observed  that  a  country  may  excel 
in  certain  particular  branches  of  the  same  species  of 
inanufacture  in  which  it  is  in  general  inferior  to  its 
neighbors.  Thus,  England,  inferior  to  France  in  every 
other  branch  of  the  silk  manufacture,  maintains  her 
superiority  in  that  of  silk  stockings. 

Again,  the  system  has  not  produced  the  same  eifect 
in  the  different  parts  of  the  same  country.  Manufac- 
tures flourish  in  Scotland  as  well  as  in  England,  whilst 
those  of  Ireland  continue  in  a  still  more  depressed  state 
than  her  agriculture.  The  central  parts  of  France  ex- 
hibit a  nearly  similar  inferiority  to  the  northern  section 
of  that  country  ;  and  our  southern  and  even  western 
States,  to  ISTew  England. 

Switzerland  is  one  of  the  few  European  countries  to 
which  the  restrictive  system  lias  not  extended ;  and  is, 
nevertheless,  that  which,  in  pro})ortion  to  her  popiila- 
tion  is,  next  to  England,  the  flrst  manufacturing  country 
of  Europe.  Exposed,  like  her,  to  the  same  revulsions, 
and  to  periods  of  distress,  when  the  channels  of  super- 
abundant manufactured  products  are  obstructed,  Switz- 
erland, unprotected  by  any  duties  whatever  on  foreign 
merchandise,  beside  certain  branches  belonging  jmr- 
ticularly  to  her,  rivals  England  in  the  cotton,  and  France 
in  the  silk  manufacture. 

If  these  observations  do  not  prove  that  the  restrictive 
system  may  not,  in  some  instances,  accelerate  the  estab- 
lishment of  manufactures,  they  show  conclusively  that 
a  tariff  acts,  at  best,  but  a  very  secondary  part,  and  that 


156  ALBERT  GALLATIN. 

there  are  some  other  causes  far  more  efficient  in  promot- 
ing domestic  industry.  A  sufficient  capital  and  a  certain 
density  of  population  are  necessary  requisites ;  and 
agriculture  will,  in  preference  to  manufactures,  attract 
labor  in  countries  or  districts  where  virgin  land  is  abun- 
dant and  within  the  reach  of  all.  But  a  single  glance 
at  the  map  of  Europe  will  satisfy  every  intelligent 
observer  that  the  great  superiority  of  some  over  other 
countries,  in  other  respects  equally  fitted  for  manufac- 
tures, is  due  to  the  nature  of  the  government,  to  laws 
wliicli  at  least  secure  to  men  the  proceeds  of  their  in- 
dustry, to  liberty,  or  at  least  comparative  liberty,  and  to 
the  diffusion  of  knowledge,  and  superior  intelligence, 
skill,  and  activity,  the  infallible  offspring  of  unrestrained 
industry,  and  of  political,  religious,  and  civil  liberty. 

We  may  also,  before  we  dismiss  this  branch  of  the 
subject,  and  in  order  to  rebut  those  general  assertions 
of  the  ruin  that  attends  all  nations  which  rely,  in  any 
considerable  degree,  on  foreign  trade  for  a  market, 
appeal  to  that  which  we  know  best,  which  we  have  seen 
and  enjoyed,  —  to  the  experience  of  North  America. 
Assisted  only  by  the  ordinary  mechanical  arts,  and  with 
hardly  any  manufacturing  establishments,  America, 
during  two  centuries,  relied  almost  exclusively  on  the 
cultivation  of  her  soil,  and  on  the  exportation  of  its 
products  to  foreign  ports ;  and  her  progress  during  that 
period,  in  popidation,  wealth,  and  all  the  arts  of  civiliza- 
tion, as  well  as  in  the  general  diffusion  of  knowledge 
and  happiness  through  all  the  classes  of  society,  stands 
unparalleled  in  the  annals  of  mankind.  A  change  of 
circumstances  may  induce  a  partial  and  gradual  alter- 
ation in  the  pursuits  of  her  citizens^  and  we  may  rest 
assured  that,  if  not  diverted  by  legislative  interference, 
they  will,  as  heretofore,  embrace  those  best  adapted  to 
their  situation. 

Since  the  national  loss,  produced  by  high  duties  on 


FREE  TRADE  MEMORIAL.  157 

importations,  consists  of  the  difference  between  the 
former  and  the  new  artificial  price,  the  evil  will  cease 
Avhenever  the  product  of  the  protected  domestic  manu- 
facture can  be  afforded,  and  is  sold  at  the  same  price  as 
the  similar  foreign  article,  free  of  the  protecting  dut}^ 
The  advocates  of  the  restrictive  system  insist  that  this 
is  the  natural  and  necessary  consequence  of  the  protect- 
ing duty,  and  is  produced  by  the  domestic  competition. 

It  must  be  observed,  in  the  first  place,  that  domestic 
competition  can  have  no  effect  either  on  the  wages,  the 
price  of  the  raw  materials,  or  that  of  provisions,  of 
machinery,  or  of  any  other  article  necessary  for  the 
manufacturing  process.  It  can  operate,  immediately, 
only  on  the  rate  of  profits  ;  and,  since  their  insufficiency 
is  the  reason  for  granting  the  protecting  duty,  its  first 
effect  is  to  raise  them.  Domestic  competition  may 
afterwards  reduce  them  to  a  rate  corresponding  with 
those  of  other  pursuits,  but  after  they  have  been  re- 
duced to  the  lowest  possible  rate,  the  price  of  the  pro- 
tected commodity  cannot  be  lessened,  otlierwise  than  by 
a  corresponding  diminution  in  the  cost  of  producing  it. 
A  reduction  of  the  price  of  labor,  or  of  the  raw  ma- 
terial, are  circumstances  independent  of  the  tariff,  and 
over  which  the  manufacturer  has  no  control.  Towards 
reducing  the  cost  of  producing  the  commodity,  com- 
})etition  can  have  no  effect,  but  in  as  far  as  it  may 
stimulate  improvements  in  the  manufacturing  process  ; 
and  for  this  there  must  be  a  sufficient  motive. 

Secondly,  competition  does  not  even  reduce  profits  to 
their  lowest  rate,  unless  the  supply  of  the  domestic 
commodity  is  equal  to  the  wants  of  the  country.  When- 
ever, and  so  long  as,  this  is  not  the  case,  a  monopoly 
is  created,  which  will  be  attended  with  all  its  usual 
consequences.  If,  instead  of  an  elevated  rate  of  duty, 
the  similar  foreign  article  is  altogether  prohibited,  the 
exorbitant  price  of  the  domestic  commodity  is  checked 


158  ALBERT  GALLATIN. 

only  by  the  lessened  demand  for  it.  That  price  is 
limited  by  that  at  wliich  tlie  foreign  article  can  still 
be  purchased,  and  by  that  alone,  when  the  importation 
is  not  prohibited,  but  only  charged  with  a  heavy  duty. 
Improvements,  tending  to  lessen  the  cost  of  production, 
may,  in  that  case,  still  be  introduced  by  the  manufac- 
turer for  his  own  benefit ;  but  the  price  of  the  domestic 
commodity  will,  nevertheless,  be  exclusively  regulated 
by  that  at  which  the  similar  foreign  article  may  be 
obtained. 

It  is,  therefore,  only  when  the  supply  of  the  domestic 
manufacture  is,  or  may  within  a  very  short  time  be 
made,  equal  to  the  full  demand  of  the  country,  that 
domestic  comjietition  may  reduce  the  rate  of  profits, 
and  ultimately  the  cost  of  production.  It  cannot  be 
doubted  that,  when  the  competition  is  with  foreign 
articles,  the  necessity  of  introducing  the  improvements 
recpiisite  for  that  purpose  is  much  grgater  than  when  it 
is  only  between  the  American  manufacturers.  When 
the  manufacture  is  already  established  at  the  time  of 
laying  the  protecting  duty,  the  improvements  which 
may  afterwards  take  place  would  have  been  introduced 
at  least  as  early,  if  the  restrictive  system  had  not  ex- 
isted; and  there  may  be  instances  where  the  duty 
prevents  or  retards  the  adoption  of  such  improvements. 

But  a  reduction  of  price  is,  in  no  case  whatever,  due 
to  the  tariff,  so  long  as  the  similar  foreign  article  can 
still  be  imported,  and  the  price  of  the  domestic  com- 
modity is  not  reduced  below  that  at  which  the  foreign 
is  sold.  Under  those  circumstances,  the  reduction  is 
clearly  due  to  a  fall  in  the  price  of  the  foreign  article, 
and  is  altogether  independent  of  the  tariff.  If,  in  any 
instance,  the  price  of  the  domestic  article  has,  immedi- 
ately after  the  tariff,  fallen  below  the  price  at  which 
the  foreign  article  could,  thenceforth,  be  imported,  it 
only  proves  that  the  duty  was  higher  than  was  neces- 


FREE  TRADE  MEMORIAL.  159 

sary  for  the  ostensible  object  in  view.  The  price  must 
fall  as  low  as  that  at  which  the  foreign  article  might 
have  been  purchased  prior  to  the  protecting  duty,  before 
the  national  loss  caused  by  it  ceases.  It  is  only  then 
that  the  domestic  manufacture  proves  successful  and 
beneficial  to  the  consumer,  and  to  the  community  at 
large. 

Coarse  cotton  goods  are  the  only  protected  branch 
which  comes  within  that  description,  and  the  causes  of 
the  fall  of  price,  which  operated  almost  simultaneously 
in  England  and  America,  are  notorious  and  acknow- 
ledged. They  cannot  be  better  expressed  than  in  the 
words  of  one  of  the  manufacturers  (Mr.  Dexter)  ex- 
amined before  the  Committee  on  Manufactures  in  1828. 
"  It  is  owing  to  the  improvement  in  machinery,  the 
reduced  price  of  raw  cotton,  and  the  increased  skill  in 
the  manufacture."  The  reduction  in  the  price  of  the 
raw  material  was  solely  due  to  the  increased  supply 
compared  with  the  demand.  The  manufacture  was 
already  firmly  established  before  the  year  1816.  As 
early  as  the  year  1810,  there  were  north  of  the  Potomac 
fifty  mills  for  spinning  cotton  in  operation,  and  twenty- 
five  more  that  went  into  operation  the  ensuing  year. 
The  weaving  business  had  commenced,  but  was  not  so 
far  advanced.  Under  those  circumstances,  the  improve- 
ments in  machinery  and  the  gradual  acquisition  of 
skill  would  have  infallibly  taken  place  with  the  com- 
mon average  duty,  which  was,  at  that  time,  about  33% 
on  the  value.  It  is  at  least  doubtful  whether  the 
favorable  result  was  hastened  by  the  tariff  of  1816, 
which  gave  a  protecting  duty  of  six  cents  and  a  quarter 
per  yard,  amounting  to  62^%  actual,  and  equivalent  to 
52%  nominal  duty  ad  valorem  on  the  prime  cost  of  the 
cheapest  India  cotton  goods  at  that  time  imported. 

A  similar  fall  of  price,  and  owing  to  the  same  causes, 
took  place  in  England  notwithstanding  the  partial  com- 


IGO  ALBERT  GALLATIN. 

petition  of  East  India  goods.  It  is  well  known  that 
the  returns  of  the  official  value  of  British  exports, 
having  been  fixed  long  ago,  and  never  been  changed, 
represent  the  quantities,  as  the  returns  of  the  declared 
show  the  actual  value  of  each  species  of  merchandise. 
The  official  value  of  cotton  goods  exported  amounted,  in 
1814,  to  £16,535,528,  and  in  1827  to  £21,445,565  stff. 
The  declared  value  for  those  two  years,  was  £17,241,884, 
and  £10,522,357,  respectively ;  but  the  true  value  for 
the  year  1814  was,  on  account  of  the  depreciated  cur- 
rency, only  £14,655,601.  Whilst  the  quantity  had, 
during  that  period  of  thirteen  years,  increased  near 
30%,  the  value  had  decreased  more  than  28%,  or,  in 
other  words,  the  price  of  cotton  goods  had  fallen  near 
one  half. 

The  suggestion  that  this  fall  in  Great  Britain  was  in 
any  degree  due  to  the  competition  with  the  American 
article,  is  quite  groundless,  since  it  was  the  result, 
partly,  of  the  fall  in  the  price  of  the  raw  material  which 
operated  at  the  same  time  on  both  countries,  principally 
to  improvements  which  originated  in  England,  and  were 
subsequently  adopted  in  America.  It  would  be  still 
more  preposterous  to  ascribe  the  fall  of  price  in  the 
foreign  article  to  American  competition,  with  respect  to 
such  as  to  iron  and  sugar,  of  which  we  export  none,  and 
import  greater  quantities  than  heretofore.  Omitting 
the  years  1813  to  1816,  during  which  the  annual  average 
consumption  of  imported  sugar  was,  by  reason  of  the 
war,  reduced  to  little  more  than  forty  millions  of  pounds, 
the  annual  average  quantities  on  which  the  duty  was 
actually  collected  appear,  by  the  Treasury  returns,  to 
have  been :  — 

For  the  seven  years,  1799-1805,  .  .  .  52,730,000 

For  the  seven  years,  1806-1812,  .  .  .  54,450,000 

For  the  seven  years,  1817-1823,  .  .  .  57,630,000 

For  the  seven  years,  1824-1830,  .  .  .  64,440,000 


FREE  TRADE  MEMORIAL.  161 

We  have  imported  less  than  if  we  had  not  had  the 
Louisiana  sugar,  but  actually  more  since  than  before. 
Louisiana  has  only  supplied  our  growing  wants,  and  has 
left  the  foreign  market,  so  far  as  the  United  States  were 
concerned,  in  the  same  situation  as  heretofore.  It  is 
the  same  with  respect  to  iron,  to  which  we  will  soon 
advert. 

We  will  only  observe  here,  that  the  decline  of  price 
in  the  Pittsburg  iron,  which  cannot  be  ascribed  to  that 
of  the  foreign  article,  is  also  independent  of  the  tariff. 
The  iron  works  of  west  Pennsylvania  were,  and  still 
continue  to  be,  protected  against  foreign  iron ;  and  that 
made  Avithin  one  hundred  miles  of  the  seashore,  by  the 
expense  of  transportation,  which  is  still  .|?40,  and  prior 
to  the  last  war  amounted  to  $80  a  ton.  Considerable 
fortunes  were  made  by  the  owners  of  the  establishments 
which  were  directed  with  skill,  frugality,  and  a  suffi- 
cient capital ;  but  there  being  no  competition,  the  iron 
was  dear,  and  of  inferior  quality.  The  price  of  trans- 
portation was  greatly  diminished  some  time  after  the 
peace,  and  the  Juniata  iron,  of  a  superior  quality,  was 
brought  to  Pittsburg,  at  the  expense  of  $30,  and  sold 
for  $100  to  $120  a  ton.  This,  united  with  unfavorable 
circumstances  under  which  the  western  country  then 
labored,  prostrated  the  iron  works  for  a  while.  But 
there  was  no  intrinsic  impediment ;  and  with  more  exjDC- 
rience,  by  the  partial  application  of  coal  and  various  other 
improvements,  tlie  iron  business  has  been  revived,  and 
the  price  of  iron,  of  much  better  quality  than  formerly, 
reduced  to  about  ninety  dollars.  The  competition  of 
the  Juniata  iron  operated,  in  this  instance,  in  the  same 
manner  as  if  it  had  been  of  foreign  origin.  Had  it  not 
been  for  it,  the  iron  of  west  Pennsylvania  would  neither 
have  been  improved  in  quality,  or  have  declined  in  price. 
And  this  effect  has  been  produced  Avithout  the  slightest 
assistance  from  the  tariff,  or  any  other  cause,  with  the 


162  ALBERT  GALLATIN. 

same  competition  to  encounter,  and  through  no  other 
means  but  a  judicious  apj)lication  of  skill  and  enterprise. 

The  only  effect  that  can  possibly  be  ascribed  to  a 
protecting  duty  is  that  of  encouraging  the  establishment 
of  manufactures  which  would  not  otherwise  have  ex- 
isted, or  of  inducing  a  greater  number  of  persons  to 
embark  in  those  already  existing.  The  propriety  of  the 
duty  depends  altogether  on  the  probability  of  speedy 
success,  that  is  to  say,  of  the  manufacture  being  so  far 
adapted  to  the  circumstances  of  the  country  that,  after 
having  been  assisted  by  the  duty  in  surmounting  the 
first  difficulties  incident  to  every  new  undertaking,  it 
will  be  able  to  sustain  itself,  and  without  such  assist- 
ance to  compete  with  the  foreign  article.  It  has  been 
clearly  shown  that  the  manufacture  is  otherwise  a  losing 
concern,  productive  of  national  loss. 

This  leads  to  the  important  distinction  between  a 
permanent  and  a  temporary  protecting  duty ;  the  first 
imposing  a  perpetual  tax  for  the  purpose  of  perpetu- 
ating a  continued  public  loss,  the  other  proper  only 
when  the  prospect  of  speedy  success  is  nearly  certain. 
For  if  necessary  to  be  continued  for  a  long  while,  the 
loss  continued  for  a  period  of  years  may  be  greater  than 
the  object  is  worth ;  and  it  would  have  been  much 
wiser  to  wait  till  the  country  was  better  prepared  for 
commencing  the  manufacture.  The  question  is,  how 
the  Legislature,  on  subjects  so  complex,  is  to  decide 
whether  there  is  a  probability  that  the  result  will  in  a 
short  time  be  favorable  ?  We  answer,  first,  that  when- 
ever the  application  is  for  a  gradually  increasing  instead 
of  a  decreasing  rate  of  duties,  it  is  a  complete  proof 
that  the  applicants  wish  a  permanent  and  not  a  tempo- 
rary duty  ;  secondly,  that  whenever  the  protecting  duty 
required  is  exorbitant,  this  likewise  clearly  proves  that 
there  is  not  any  expectation  of  a  speedy  favorable  re- 
sult.    It  is  clear  that  the  protection  required  must  be 


FREE  TRADE  MEMORIAL.  163 

proportionate  to  the  difficulty  of  establishing  the  manu- 
facture, and  that  the  country  is  better  prepared  for  those 
which  require  the  least  protection.  A  moderate  and 
uniform  duty  will  naturally  encourage  these,  without 
the  necessity  of  any  special  legislative  interference, 
whilst  those  alone  will  be  postponed  which,  for  the 
very  reason  that  they  require  a  higher  protection,  ought 
not  yet  to  be  attempted.  Instead  of  an  artificial  and 
precarious  system,  the  progress  will  be  natural,  steady, 
and  permanent.  The  charges  on  imported  articles  vary 
according  to  their  nature,  are  seldom  if  ever  less  than 
10%,  and  sometimes  amount  to  20%.  A  general  duty 
of  20%  added  to  those  charges  would  give  an  actual 
protection  of  30%,  much  greater  than  that  under  which 
all  the  usual  mechanical  arts  have  been  firmly  established 
in  the  United  States ;  greater  than  is  asked  by  several 
branches  uoav  suffering  under  the  present  partial  sys- 
tem, and  amply  sufficient  for  the  encouragement  of  any 
manufacture  which  there  is  any  probability  of  establish- 
ing successfully  within  a  reasonable  time.  The  duty  of 
30%  substituted  in  England  to  the  entire  prohibition 
of  foreign  silk  stuffs  has,  notwithstanding  the  clamors  of 
those  interested,  promoted,  instead  of  injuring  the  Brit- 
ish manufacture  ;  and  Mr.  Hamilton,  so  often  quoted, 
never  proposed  a  protecting  duty  of  15%  ad  valorem. 

It  has  been  correctly  observed  that  with  the  exception 
of  the  silk  and  some  thread  manufactures,  the  boasted 
departure  by  Great  Britain  from  the  restrictive  system 
is  nominal,  since  the  former  high  duties  on  articles 
which  she  affords  cheaper  than  any  other  country  were 
entirely  useless.  The  reduction  of  a  prohibitory  to  a 
duty  of  15%  proves  at  least  that  the  price  of  the  do- 
mestic article  was  actually  reduced  to  a  rate  that  did 
not  fear  foreign  competition.  But  there  is  a  glaring 
contradiction  between  the  assertion  "that  nine  tenths 
of  the  American  people  who  do  not  affect  foreign  lux- 


164  ALBERT  GALLATIN. 

uries  and  fashions  may  be  clothed  with  woollen,  cotton, 
fur,  and  leather  fabrics  of  their  own  country  better  and 
cheaper  than  either  could  have  been  obtained  abroad  if 
the  tariff  had  never  been  enacted,"  and  the  pertinacity 
with  which  the  restrictionists  oppose  the  repeal  or  mod- 
ification of  the  high  duties  imposed  precisely  on  the 
coarsest  woollen  and  cotton  fabrics  which  are  worn  by 
nine  tenths  of  the  people. 

Having  examined  the  restrictive  system  in  reference 
to  the  country  at  large,  and  considered  as  a  whole,  your 
memorialists  will  now  call  the  attention  of  your  honor- 
able body  to  its  effects  on  the  various  classes  of  society 
and  different  parts  of  the  Union.  But  they  will  confine 
themselves  to  its  most  prominent  features,  and  to  the 
most  important  of  the  protected  branches  of  industry ; 
and  for  further  details,  they  beg  leave  respectfully  to 
refer  to  the  expositions  now  prepared,  or  being  prepared, 
by  some  amongst  themselves  who  have  undertaken  to 
collect  the  facts,  and  will  lay  them  before  Congress. 

It  is  not  our  intention  to  discuss  the  effect  produced 
on  the  persons  employed  in  large  manufacturing  estab- 
lishments. The  owners  are  entitled  to  much  credit  for 
their  attention  to  the  comfort,  morals,  and  education  of 
those  who  are  placed  under  their  care.  We  only  con- 
tend that  there  is  nothing  in  that  respect  which  should 
induce  the  Legislature  to  divert  the  people  in  general 
from  other  pursuits  to  that  of  being  employed  in  a 
manufacture.  Operatives  in  America  stand  in  the 
same  relation  towards  their  employers  as  those  of  simi- 
lar establishments  in  other  countries.  The  only  differ- 
ence consists  in  the  higher  rate  of  wages  they  receive  ; 
and  for  that  they  are  not  indebted  to  the  manufactures, 
but  to  that  great  cause  already  often  alluded  to,  and  the 
effect  of  which  is  acknowledged  by  the  advocates  of  the 
protecting  system  when  they  say  "that  the  peculiar 
advantage  of  the  United  States  consists  in  the  abun- 


FREE  TRADE  MEMORIAL.  165 

dance  and  cheapness  of  fertile  lands,  affording  an  easy- 
subsistence  and  high  remuneration  to  labor."  And  they 
might  have  added  that  this  is  the  circumstance  which 
keeps  up  that  high  remuneration  even  in  those  parts  of 
the  Union  where  lands  have  acquired  the  highest  value. 
Industry  should  be  perfectly  free  and  every  one  left  at 
liberty  to  select  that  pursuit  Avhich  in  his  opinion  will 
most  contribute  to  his  happiness.  A  comparison  might 
nevertheless  be  drawn  between  the  respective  situa- 
tions, at  the  end  of  thirty  years,  of  the  working  men 
Avho  have  availed  themselves  of  the  natural  advantages 
offered  by  the  facility  with  which  the  rich  unimproved 
lands  of  America  may  be  acquired,  and  of  those  who 
have  attached  themselves  to  a  manufacturing  establish- 
ment. 

But  the  restrictive  system  is  in  every  instance  inju- 
rious to  those  branches  of  industry  which  do  not  want 
special  protection,  and  often  operates  even  against  the 
protected  manufactures.  That  system,  when  artificially 
enhancing  the  price  of  those  commodities  which  are 
the  product  of  such  manufactures,  necessarily  enhances 
also  the  price  of  the  products  of  every  other  branch  of 
industry  or  depresses  that  of  labor.  It  is  clear  that 
the  mechanic  who  pays  $20  more  for  the  implements  of 
his  trade,  the  necessary  clothing  of  his  family,  and  the 
sugar  it  consumes,  must  either  enhance  the  price  of  the 
products  of  his  industry  in  the  same  proportion,  or 
receive  so  much  less  for  his  labor.  The  nominal  wages 
of  the  journeyman  and  of  the  laborer  do  now  remain 
the  same  ;  whilst  the  true  price  of  their  labor,  the  com- 
pensation they  actually  receive,  has  been  lessened  to  an 
amount  precisely  ecjual  to  the  enhanced  price  of  the  nec- 
essary articles  they  must  purchase.  The  evil  increases 
as,  in  order  to  remove  complaints  and  render  the  system 
l)opular,  it  is  extended  to  a  greater  number  of  branches, 
and  affects  in  the  same  manner  the  protected  manufac- 


1G6  ALBERT  GALLATIN. 

tures  by  either  increasing  the  cost  of  production  or  les- 
sening the  real  wages  of  the  workmen. 

This  suhstitution  of  nominal  for  real  wages  is  proved 
by  the  evidence  taken  in  1828  by  the  Committee  of 
Manufactures.  Several  of  these,  and  particularly  the 
woollen  manufacture  of  Steubenville,  appear  to  have 
been  sustained  by  the  retail  sales  of  foreign  goods 
connected  with  the  establishment ;  and  the  principal 
])rofit  of  the  owners  to  have  consisted  in  that  which 
they  made  on  the  goods  with  which  they  paid  their 
workmen,  and  the  provisions  and  other  supplies  pur- 
chased from  the  farmers.  This  was  a  very  natural  and 
legitimate  process  ;  but  it  is  remarkable  that  the  means 
used  to  substitute,  as  is  said,  domestic  for  foreign  in- 
dustry, should  have  been  a  much  more  extensive  sale  of 
foreign  commodities  than  would  otherwise  have  taken 
place. 

In  trying  to  reconcile  a  majority  of  the  people  to  the 
system,  and  for  the  purpose  of  obtaining  still  greater 
protection,  the  advocates  of  restrictions  have  altogether 
departed  from  a  principle,  the  soundness  of  which  is 
admitted  by  all,  and  by  none  more  than  by  those  who 
would  sacrifice  every  other  interest  to  that  of  certain 
favored  manufactures.  In  the  face  of  the  example  and  of 
the  experience  of  other  nations,  so  strenuously  appealed 
to,  they  have  attempted  to  promote  manufactures,  by 
laying  high  and  sometimes  prohibitory  duties  on  the 
raw  materials,  —  in  one  instance  on  that  of  the  very 
manufacture  which  was  the  particular  object  of  their 
solicitude,  in  others  with  a  total  disregard  for  the 
branches  which  depended  on  the  taxed  material. 

By  the  tariff  of  1816,  a  duty  of  6J  cents  was  laid  on 
every  square  yard  of  cotton  goods,  the  prime  cost  of 
which  did  not  exceed  25  cents ;  and  as  the  average  rate 
of  duties  was  then  about  35%,  it  was  only  on  goods  un- 
der 18 1  cents  that  the  average  rate  was  exceeded.     But 


FBEE  TRADE  MEMORIAL.  167 

the  law  at  the  same  time  recognized  the  principle,  that 
a  protecting  duty  should  be  temporary;  and  it  was 
accordingly  provided  that  the  minimum  should  at  the 
end  of  three  years  be  reduced  from  25  to  20  cents,  or,  in 
other  words,  that  the  duty  per  square  yard  should  then  be 
reduced  to  5  cents  on  all  goods  the  prime  cost  of  which 
was  less  than  20  cents.  As  if  to  show  that  the  object 
is  to  lay  perpetual  protecting  duties,  or  a  perpetual  tax 
on  the  community,  without  any  expectation  that  the 
price  of  the  protected  commodity  will  be  reduced,  the 
provision  has  in  several  instances  been  reversed,  and 
an  increasing  instead  of  decreasing  scale  of  duties  been 
adopted.  If  a  duty  of  $35  per  ton  was  sufficient  in 
order,  for  instance,  that  American  might  compete  with 
foreign  flax,  no  provision  should  have  been  made  for 
gradually  raising  the  duty  to  $60.  If  a  duty  of  $60 
was  requisite  for  that  purpose,  there  could  be  no  ex- 
pectation that  the  flax-grower  would  gratuitously  lose 
money  by  raising  the  commodity  before  that  duty  was 
in  force.  If  there  was  an  avowed  want  of  information 
on  the  subject,  it  would  have  been  a  wiser  course  to  wait 
till  it  had  been  obtained. 

In  regard  to  the  manufactures  of  cotton,  it  has  already 
been  observed  that  the  minimum  now  raised  to  35  cents, 
instead  of  being  reduced  to  20,  according  to  the  act  of 
1816,  is  the  only  objectionable  provision.  This  is  a 
duty  of  8|  cents  on  every  square  yard,  when  the  prime 
cost  is  less  than  35  cents.  The  duty  is  nominal  in  ref- 
erence to  most  of  the  goods  under  15  cents,  which  not 
only  are  afforded  as  cheap  by  the  American  manufacturer 
as  the  foreign  article,  but  compete  with  this  in  foreign 
markets.  Reduced  to  a  duty,  ad  valorem,  it  decreases  on 
goods  costing  more  than  15,  and  under  35  cents,  from 
about  60%  to  25%.  We  are  not  informed  that  any 
progress  has  been  made  since  1828,  when  this  protect- 
ing duty  was  raised  from  7J  to  8f  cents  a  yard  in  the 


168  ALBERT  GALLATIN. 

domestic  manufacture  of  unmixed  cotton  goods  within 
those  prices.  The  mixed  stuff  called  sattinett  appears 
from  its  price  to  be  protected  only  by  the  general  duty 
of  2;")%,  and  yet  no  foreign  article  is  imported  that 
competes  with  it.  The  manufacture  owes  less  to  pro- 
tection, and  flourishes  more  than  any  other  favored 
branch ;  and  it  does  not  affect  injuriously  any  other 
manufacture,  otherwise  than  by  the  beneficial  substitu- 
tion, in  many  instances,  of  cheaper  for  dearer  articles. 
We  do  sincerely  believe  that  the  repeal  of  the  minimum 
would  not  affect  it,  and  tliat  the  average  duty  of  25% 
added  to  the  charges  on  the  importation  would  give  it 
all  the  protection  which  the  manufacturers  ought  to 
desire. 

The  important  objecte  more  particularly  objection- 
able, are :  — 

Hemp,  flax,  and  some  of  the  manufactures  of  hemp 
and  flax. 

Iron,  particularly  rolled  iron,  and  a  few  branches  of 
the  manufactures  of  iron. 

Wool,  particularly  of  species  coarser  than  any  native 
wool  of  the  United  States,  and  the  woollen  manufac- 
tures embraced  by  the  system  of  minimums. 

Sugar,  salt,  and  coal. 

The  small  quantities  of  American  hemp  which  are 
brought  to  the  Atlantic  seaports  are  now  sold  at  about 
J^150  per  ton.  The  prime  cost  of  the  best  Russia  hemp, 
delivered  on  board,  is  about  $130.  The  subsequent 
charges  amount  to  at  least  18%,  and  it  cannot  be  de- 
livered in  America,  free  of  duty,  under  $154 ;  the 
duty  is  now  $60  per  ton,  or  more  than  46%  on  the 
value.  It  sells  for  about  $220.  The  American  hemp 
is  fit  for  the  manufactures  of  common  rope  and  cotton 
bagging ;  but,  either  from  the  effect  of  climate,  or  rather, 
as  is  generally  believed,  from  its  being  dew-rotted,  it  is 
totally  unfit  and  is  never  used  for  cables  or  any  species 


FREE  TRADE  MEMORIAL.  169 

of  cordage  which  may  come  in  contact  with  sea-water. 
Notwithstanding  the  heavy  duties,  equivalent  to  more 
than  80%  on  tarred  and  95 '^  on  untarred  cordage,  about 
800  tons  of  that  foreign  article  are  still  imported.  The 
duty  on  the  raw  material  has  deeply  affected  the  domes- 
tic manufacture,  and  operates  as  a  heavy  tax  on  the 
shipping  interest,  without  affording,  in  that  respect,  any 
benefit  to  the  American  hemp  grower. 

The  duty  of  5  cents  a  yard,  equivalent  to  50%  on 
the  value  of  cotton  bagging,  is  of  the  same  character. 
Near  700,000  yards  of  the  foreign  article  are  still  im- 
ported; substitutes  made  of  cotton  or  tow  have  been 
introduced,  and  the  domestic  manufacture  is  seldom  if 
ever  used  in  the  Atlantic  States.  Cotton  bagging  is 
exclusively  used,  and  is  absolutely  necessary  for  the 
purpose  of  packing  cotton  for  exportation.  With  re- 
spect to  that  which  is  shipped  to  foreign  ports,  the  duty 
operates  precisely  as  a  tax  on  exports. 

Your  memorialists  are  averse  to  any  duty  on  the  im- 
portation of  raw  materials  ;  but  if  continued,  the  ave- 
rage duty  of  25%  ad  valorem,  or  the  equivalent  specific 
duty  of  about  $32  a  ton  on  hemp,  giving,  together  with 
the  charges  on  importation,  a  protection  of  near  45%, 
to  the  hemp  grower,  would  enable  him  to  compete  with 
the  foreign  article  in  every  manufacture  for  which  it  is 
fitted,  and  continue  to  secure  to  him  the  market  for 
cotton  bagging,  in  the  district  of  cotton  country  adja- 
cent to  those  where  hemp  is  raised.  As  a  matter  of 
course,  the  duty  on  cordage  should  be  reduced  to  the 
same  rate. 

The  duty  on  flax  is  a  still  more  gratuitous  and  un- 
necessary tax.  That  of  American  growth  is  well  fitted 
for  all  the  common  fabrics  and  uses  to  which  it  has 
heretofore  been  applied ;  and  its  comparative  cheapness 
had  always  prevented  any  foreign  competition  in  that 
respect.     But  it  is  totally  unfit  for  the  manufacture  of 


170  ALBERT  GALLATIN. 

sail  duck ;  and  it  was  for  this  purpose  that  Eussian  or 
other  foreign  flax  was  imported.  The  prime  cost  of  that 
of  llussia  generally  exceeds  $133  a  ton,  and  the  charges 
are  the  same  as  on  hemp.  The  duty  is  now  $50  a  ton, 
equivalent  to  37^%  ad  valorem,  and  it  is  to  be  raised  to 
,f  ()(),  or  45%  on  the  prime  cost.  The  existing  duty  has 
been  sufficient  to  reduce  the  importation  to  less  than 
three  hundred  tons.  Its  only  effect  has  been  to  affect 
most  injuriously,  the  domestic  manufacture  of  sail  duck, 
and  the  shipping  interest.  Notwithstanding  the  cor- 
responding duty  of  about  40%  ad  valorem,  the  value  of 
the  sail  duck  imported  during  the  year  1830  amounted 
to  near  $320,000,  and  that  of  the  flax  to  less  than 
$40,000 ;  and  all  the  ships  trading  to  foreign  ports  use, 
as  far  as  practicable,  the  foreign  article.  The  attempt 
to  a})ply  to  that  purpose  the  American  flax  has  been  a 
complete  failure,  and  the  duty  confers  no  benefit  on  the 
grower. 

The  manufacture  of  cast  and  bar  iron  was  one  of  the 
few  wliich  had  been  established  in  America,  under 
the  colonial  Government.  It  owed  its  origin  to  the 
destruction  of  the  English  forests,  and  the  abundance 
of  wood  in  America.  The  price  of  bar  iron  is  stated  to 
have  been  at  that  time  $64  a  ton,  and  to  have  risen  to 
about  $80  in  the  year  1790.  The  application  of  bitumi- 
nous coal,  and  other  improvements  in  the  manufacture, 
have  produced  a  revolution,  Avhich  has  increased  the 
annual  quantity  of  malleable  iron  made  in  England  from 
seventy  to  more  than  six  hundred  thousand  tons,  and 
has  enabled  her  to  sell  the  various  descriptions  of  the 
species  called  "  rolled  iron "  at  a  lower  price  than  that 
at  which  any  species  whatever  can  be  afforded  anywhere 
else.  Notwithstanding  the  acknowledged  superiority 
of  that  of  Russia  and  Sweden  for  certain  purposes,  the 
cheapness  of  the  British  manufacture  has  lessened 
the  demand  for  that  of  every  other  country,  and  seems 


FREE  TRADE  MEMORIAL.  171 

ultimately  to  have  affected  the  price  of  every  species. 
Although  it  had  not,  in  1816,  been  yet  reduced  to  its 
present  rate,  Congress  was  induced  to  raise,  by  the 
tariff  of  that  year,  the  duty  on  rolled  iron  from  15%  ad 
valorem,  to  a  specific  duty  of  $30  a  ton,  equivalent  at 
that  time  to  about  67%  on  the  value.  This  was  again, 
in  1828,  raised  to  $37  a  ton,  which  on  account  of  the 
progressive  fall  in  the  price  of  that  article,  is  now 
equivalent,  according  to  the  official  statement  of  im- 
posts for  1830,  to  an  average  duty  of  113^%  on  the 
value  of  the  whole  amount  of  the  different  qualities  of 
that  species  which  are  imported  into  the  United  States. 
The  specific  duty  of  $9  a  ton,  laid  in  1816,  on  hammered 
or  Swedish  and  Eussian  iron,  did  not  exceed  the  former 
rate  of  15%  ad  valorem.  It  was  raised  in  1818  to  $15, 
in  1824  to  $18,  and  in  1828  to  $22.40,  which  is  equiva- 
lent to  a  duty  of  40  %  ad  valorem. 

It  appears  that,  notwithstanding  those  high  duties, 
the  importations  either  of  bar  iron,  or  of  the  total 
amount  of  the  manufactures  of  which  it  is  4;he  principal 
material,  instead  of  being  lessened,  have  gradually  in- 
creased. The  imported  quantity  of  some  of  the  pro- 
tected branches  of  those  manufactures  has  diminished ; 
but  the  whole  quantity  imported  has  increased  in  a  still 
greater  ratio  than  appears  by  the  Treasury  statements. 
These,  for  the  articles  paying  duties  ad  valorem,  and 
which  constitute  nine  tenths  of  the  whole,  give  only  the 
value,  which  has  decreased  in  a  ratio  in  some  degree 
corresponding  with  the  fall  of  the  price  of  British  iron. 
The  annexed  table  shows  the  annual  average  of  the 
quantities  of  bar  iron,  and  of  the  value  of  hardware, 
and  other  manufactures  of  iron,  respectively,  consumed 
in  the  United  States  (deducting  the  exportations  from 
the  importations),  for  each  of  the  periods  therein  men- 
tioned. 


172 


ALBERT  GALLATIN. 


Tears. 

KoUed  Iron. 

Hammered  Iron. 

Manufactures  of  Iron. 

1817-1820 
1821-1824 

1826-1827 
1828-1830 

To?is. 

2,2371 

4,212 

5,400 

0,450 

Tons. 
16,8871 
23,162 
22,650 
31,000 

Dollars. 

Not  ascertained. 

2,600,000 

3,630,000 

3,660,000 

It  is  difficult  to  estimate  the  progress  made  in  the 
domestic  manufacture,  during  those  fourteen  years,  and 
the  quantity  of  cast  and  bar  iron  now  annually  made  in 
the  United  States.  In  a  statement  lately  made  by  per- 
sons interested  in  the  manufacture,  the  whole  amount 
of  bar  is  calculated  at  112,000  tons,  and  the  aggregate 
valne  of  both  cast  and  bar  at  more  than  $13,000,000 ; 
l)ut  the  quantity  of  bar  iron,  taken  from  actual  returns, 
is  less  than  50,000  tons,  and  the  residue  is  an  estimate 
derived  from  the  number  of  furnaces  of  which  no  returns 
had  been  obtained.  Taking  as  a  basis  the  returns  of 
the  marshals*  in  the  year  1810,  by  which  it  appears  that 
the  quantity  of  bar  iron  then  made  in  the  United  States 
did  not  exceed  27,000  tons,  and  admitting  that  the  in- 
crease must  have  been  in  the  compound  ratio  of  the 
increase  of  population,  and  of  the  diminution  of  price, 
the  amount  now  made  should  be  from  60,000  to  70,000 
tons.  This  is,  however,  a  question,  which,  from  want 
of  authentic  materials,  we  shall  not  pretend  to  discuss. 
But  supposing  the  quantity  to  be  such  as  has  been 
represented,  the  estimated  value  is  too  high.  At  the  rate 
of  $85  for  the  bar  iron,  and  of  $50  for  the  castings,  the 
aggregate  value  would  not  exceed  $11,275,000.  Those 
who  ascribe  to  the  tariff  the  fall  of  price  ought  to  cal- 
culate the  value  according  to  that  fall,  and  not  according 
to  the  price  of  iron  before  it  took  place. 

1  The  quantities  for  1817-1820  are  those  on  which  the  duties  were 
paid,  deducting  drawbacks.  The  value  of  the  manufactures  of  iron 
for  those  years  is  not  distinguished. 


FREE  TRADE  MEMORIAL.  173 

Iron  is  a  commodity  too  heavy  to  be  transported 
beyond  a  certain  distance.  It  has  already  been  observed 
that  the  transportation  from  the  seaports  to  Pittsburg 
costs  $40  a  ton.  The  country  west  of  the  Alleghany 
mountains  is  not  supplied  with  foreign  iron ;  and,  with 
the  exception  of  the  small  quantities  brought  from  the 
nearest  works  on  the  east  side,  must,  for  that  article, 
depend  on  its  own  resources.  In  examining  the  effect 
of  those  duties,  either  on  the  home  manufacture,  or  on 
the  consumer,  the  quantity  of  iron  made  in  that  section 
of  the  country,  and  in  several  other  remote  districts, 
which  simply  supply  themselves,  must  be  deducted. 
The  quantity  and  price  of  the  imported  iron  can  have 
no  effect  but  on  those  districts  along  the  sea  border, 
and  within  a  certain  distance  from  it,  where  it  can  be 
carried,  and  comes  in  competition  with  the  domestic 
manufacture. 

We  have  not  been  sxipplied  with  sufficient  data  to 
form  an  estimate  of  the  quantity  of  American  which 
thus  competes  with  foreign  iron.  But  we  know  with 
precision  the  amount  imported ;  and  so  far  as  relates  to 
quantity,  the  only  fact  fully  established  is,  that,  not- 
withstanding the  exaggerated  protecting  duties  which 
they  have  obtained,  the  Atlantic  iron  masters  have  not 
been  able  to  supply  the  Avants  of  the  country,  and  that, 
so  far  from  effecting  this  object,  there  has  been  a  pro- 
gressive increase  in  the  importation  of  both  bar  iron 
and  manufactures  of  iron.  Whether  the  quantity  which 
they  do  supply  is  equal  to  doul)le  or  treble  of  that  which 
is  imported  does  not  materially  affect  the  result,  in  ref- 
erence either  to  agriculture,  commerce,  or  the  various 
and  important  manufactures  of  which  iron  is  the  ma- 
terial. So  long  as  large  quantities  of  foreign  iron  are 
imported,  the  price  of  the  domestic  manufacture  has  not 
fallen  lower  than  the  amount  of  the  protecting  duty, 
added  to  tlie  price  at  which  the  foreign  article  might  be 


174  ALBERT  GALLATIN. 

obtained  if  that  thitj  iiad  not  been  laid;  and  the  differ- 
ence in  price,  which  constitntes  a  national  loss  and  is 
paid  by  the  consumer  or  manufacturer,  is  precisely  equal 
to  the  amount  of  that  duty.  If  that  duty  was  reduced 
$10  per  ton,  the  foreign  iron  would  most  undoubtedly 
be  purchased  $10  cheaper  than  it  now  is. 

In  order  to  repel  that  obvious  fact,  the  parties  inter- 
ested have  been  compelled  to  assert  that  the  fall  of 
price  which  has  taken  place  in  foreign  iron  is  due  to  the 
tariff.  They  insist  that  the  effect  of  that  measure  was 
to  cause  a  decline  in  the  price  of  American  iron,  and 
that  the  foreign  iron  masters  were  thereby  compelled  to 
reduce  the  rate  of  their  previous  enormous  profits,  in 
order  to  be  able  to  sell  their  iron  in  America.  They  go 
still  farther,  and  assert  that  no  sooner  had  the  tidings 
of  the  tariff  of  1828  reached  England,  than  the  owners 
of  forges  and  furnaces  determined,  rather  than  lose  the 
American  market,  to  lower  the  price  of  their  iron,  at 
first  $4  and  then  $8  per  ton.  The  annual  quantity  of 
British  bar  iron  imported  into  America  during  the  six 
preceding  years  did  not  amount  to  6,000  tons,  worth  at 
that  time  $260,000.  The  total  amount  made  in  Great 
F)ritain  exceeded,  at  that  time,  600,000  tons  ;  so  that  the 
British  iron  masters,  rather  than  lose  the  profit  they 
might  make  on  a  sale  of  $260,000,  must  have  deter- 
mined, by  a  general  reduction  of  $8  a  ton,  to  incur  at 
once  a  loss  of  near  $5,000,000  a  year.  It  is  hardly 
necessary  to  argue  this  point.  If  even  the  decline  of 
price  had  commenced  in  America,  it  is  impossible  that 
any  differences  affecting  the  sale  of  6,000  tons  could  have 
any  effect  on  the  price  of  a  mass  of  iron  amounting  to 
600,000,  and  annually  increasing.  But  no  fact  is  better 
ascertained  than  that  of  the  gradual  —  and,  with  the  or- 
dinary fluctuations  incident  to  trade,  continued  —  fall  of 
the  price  of  British  iron.  It  must  be  remembered  that 
the  tariff  of  1828  made  no  change  in  the  rate  of  duty  on 


FREE  TRADE  MEMORIAL.  175 

the  Swedish  and  Russian.  We  are  less  acquainted  with 
the  causes  of  the  fall  in  their  price.  The  most  obvi- 
ous is  the  great  supply  furnished  by  England  to  those 
nations  that  have  not,  like  France  and  the  United  States, 
prohibited  or  heavily  charged  her  iron,  and  which  must 
have  necessarily  lessened  the  demand  for  the  dearer 
article  imported  from  the  Baltic. 

The   supposition,   that   the   decline   of   the   price  of 
American,  instead  of  being  the  necessary  result,  was 
the  cause  of  the  fall  of  the  price  of  Baltic,  and  even 
British  iron,  rests,  besides,  on  another  supposition,  to 
wit,  that  the  tariff  did,  immediately,  and  even  before 
any  new  works  had  been  erected,  produce  the  fall  in  the 
price  of  American  iron.     This  needs  no  elaborate  refu- 
tation ;  but  we  may  be  permitted  to  ask  an  explanation. 
In  the  beginning  of  the  year  1828,  when  American 
iron  sold  at  f  100  in  our  seaports,  the  American  owners 
of  forges  and  furnaces  declared  themselves  unable  to 
compete  at   least  with   British   iron.     Now  the  impor- 
tation of  neither  that  or  any  other  of  foreign  origin 
had  lowered  for  a  number  of  years  the  sale  of  theirs 
below  that  rate  ;  and  it  is  evident  that,  in  asking  for 
further  protection,  their  object  was  not  to  cause  a  fall 
in  the  price  of  their  commodity,  which,  according  to 
all  their  statements,  they  could  hardly  afford  at  that 
rate.     It  was  on  that  account  that  the  additional  ])ro- 
tecting  duty  of  $7  on  rolled  iron  was  granted,  although 
at   the   then   existing   rate    of    duty,    the   interference 
of  that   species  did  not  amount  to  6,000  tons  a  year. 
The  price  of  the  same  American  iron  has  noAv  sunk,  for 
near  two  years,  in  our  seaports,  to  f  85  a  ton.     With 
this  diminution  the  iron  masters  are  satisfied ;  the  busi- 
ness, as  they  say,  has  increased  25%,  and  new  works  are 
being  created  everywhere.     During  that  time,  neither 
the  price  of  labor,  charcoal,  provisions,  or  other  supplies, 
has  been  diminished.     To  what  cause,  then,  is  the  fall 


176  ALBERT  GALLATIN. 

of  price  to  be  ascribed  ?  We  have  heard  of  no  improve- 
ment made  in  the  manufacturing  process  in  the  charcoal 
country ;  but  whether  this  has  taken  place  or  the  profits 
have  been  reduced,  it  is  equally  clear  that  this  might 
have  been  voluntarily  done  without  the  additional  tariff, 
and  has  been  done  because  the  tariff  had  no  effect  on 
the  importation,  and  was  forced  on  the  iron  masters  by 
the  unexpected  fall  of  price  in  the  British  and  other 
foreign  iron. 

We  need  not  dwell  on  the  injustice  and  mischievous 
effects  of  an  exaggerated  duty  on  an  article  of  such 
general  use  as  iron.  It  falls  upon  the  farmer,  the  me- 
chanic, the  shipping  interest,  and  on  every  branch  of 
the  iron  manufacture,  those  few  excepted  which  have 
been  embraced  by  the  partial  protecting  system ;  and  it 
operates,  in  the  most  unequal  and  unjust  manner,  on 
those  parts  of  the  country  which  have  no  iron  of  their 
own,  and  might  be  supplied  on  cheaper  terms  under  a 
rational  system  of  moderate  duties.  The  only  reason 
why  the  extravagant  duty  is  not  universally  opposed  is 
because  the  tax  thus  laid  on  the  agriculturist  and  the 
mechanic  is  spread  over  such  an  extent  of  country,  and 
falls  upon  so  many,  that  the  amount  paid  by  each,  levied 
as  it  is  indirectly  and  in  small  portions  at  a  time,  is 
not  generally  understood.  Those  who  do  understand 
and  feel  it  have  not  individually  a  sufficient  interest  in 
the  result  to  induce  a  general  and  efficient  combination. 
The  law  has  created  a  monopoly  in  favor  of  the  owners 
of  beds  of  ore,  who,  unable  to  supply  the  wants  of  the 
country,  will  not  permit  it  to  be  supplied  from  other 
quarters.  They  may  easily  combine,  and  their  interest, 
when  compared  with  that  of  the  mechanics  and  scat- 
tered agriculturists,  has,  here  as  elsewhere,  been  found 
too  powerful.  This  is  so  true  that  when  an  equally  or 
more  powerful  interest  was  opposed  to  theirs  they  were 
obliged  to  yield,  and  the  importation  of  iron  intended 


FREE  TRADE  M'eMORIAL.  177 

for  railroads  was  permitted  under  the  moderate  duty  of 
15%.  We  approve  this  measure  as  being  founded  on 
the  best  interests  of  the  country.  We  only  ask  that  the 
same  principle  be  applied  to  the  community  at  large. 
There  is  no  other  ditference  between  this  case  and  that 
of  agriculture,  or  any  other  important  branch  of  in- 
dustry, than  that,  in  one  case,  the  amount  of  the  tax, 
presented  as  a  whole,  made  its  pernicious  effects  at  once 
visible,  whilst  divided,  in  the  other,  amongst  50,000 
individuals,  the  aggregate,  though  equal  in  amount,  does 
not  attract  notice. 

The  injurious  effect  which  the  duty  has  on  the  nu- 
merous mechanics  employed  in  the  various  manufac- 
tures of  iron  has  been  so  ably  and  forcibly  exposed  in 
their  representations  to  your  honorable  body,  that  we 
have  nothing  to  add  on  that  subject ;  but,  as  we  beg 
leave  respectfully  to  refer  to  their  memorials,  we  must 
do  it  with  one  exception.  So  far  as  we  are  informed, 
we  are  induced  to  believe  that  they  have  overrated  the 
quantity  of  iron  contained  in  the  hardware  imported 
into  this  country,  —  an  error  which,  if  it  is  one,  does 
not  weaken  their  arguments  respecting  the  main  ques- 
tion at  issue.  The  leading  facts  are,  that  amongst  the 
foreign  manufactures  imported  into  the  United  States, 
hardware,  cutlery,  and  all  others  of  which  iron  is  the 
material,  are  exceeded  only  by  those  of  cotton,  woollen, 
and  silk  stuffs ;  and  that  the  prime  cost  of  the  quantity 
annually  consumed  amounts  to  $3,500,000,  whilst  that 
of  the  bar  iron  imported  from  England,  whence  the 
manufactures  of  that  metal  are  almost  exclusively  im- 
ported, does  not  amount  to  $240,000.  Whatever  may 
be  the  quantity  of  bar  iron  used  in  the  manufacture  of 
the  hardware  and  other  articles  thus  imported,  it  inter- 
feres equally  with  American  bar  iron,  whetlier  imported 
as  a  raw  material  or  in  its  manufactured  state.  If  the 
quantity   thus  used  does   not,    as   is   asserted,    exceed 


178  ALJiEnr  gallatin. 

9,000  tons,  the  prime  cost  of  which  is  less  than  J^SSOjOOO, 
the  duty  wliich  prevents  its  importation  arrests  the 
progress  of  those  branches  of  industry  which  woukl 
t)therwise  convert  that  raw  material  into  manufactured 
articles,  worth  $3,500,000.  The  working  men,  who  are 
able  and  willing  to  apply  their  labor  to  this  highly 
desirable  and  truly  profitable  object,  do  not  ask  your 
honorable  body  for  any  extraordinary  protection,  but 
only  that  the  impediments  arising  from  an  extravagant 
protecting  duty  on  the  raw  material  may  be  removed. 
There  cannot  be  a  stronger  illustration  of  the  effect 
produced  by  the  restrictive  system  in  arresting  the  nat- 
ural progress  of  American  industry,  and  diverting  it 
from  profitable  to  unprofitable  pursuits.  The  remedy 
proposed  by  the  restrictionists,  like  that  of  those  legis- 
lators who  never  can  find  any  other  for  the  prevention 
of  crimes  than  to  multiply  the  number  of  offenses  for 
which  capital  punishments  shall  be  inflicted,  is  to  ex- 
tend what  they  call  protection  to  those  who  suffer  under 
the  pernicious  effects  of  their  system.  They  simply 
propose  to  aggravate  the  evil  and  to  increase  the  amount 
of  the  national  loss,  and  of  the  tax  paid  by  the  con- 
sumers, by  converting  that  branch  of  industry  which 
can  sustain  itself  and  would  prosper,  were  it  not  for 
their  interference,  into  another  privileged  manufacture, 
which  must  be  supported  at  the  public  expense,  and 
could  not  then  supply  the  wants  of  the  country. 

The  average  prime  cost  of  the  hammered  iron  im- 
ported during  the  year  1830  was,  according  to  the 
treasury  statements,  $57  a  ton,  or  $7  less  than  the  av- 
erage price  of  the  five  preceding  years.  The  charges 
amount  to  $10,  and,  with  a  duty  of  25%,  it  could  not, 
at  that  rate,  be  delivered  in  our  seaports  for  less  than 
$82.  Its  average  price  in  New  York  during  that  year 
was  $91,  varying  from  $85  to  $100. 

The  average  prime  cost  of  the  various  descriptions  of 


FBEE  TRADE  MEMORIAL.  179 

rolled  iron  imported  during  the  same  year  was  $32.50  ; 
the  charges  may  not  amount  to  more  than  $3.50.  Its 
average  price  in  New  York  during  that  year  was  $74.50. 
Under  a  duty  of  25(/of  it  might,  at  the  same  prime  cost, 
be  delivered  in  our  seaports  at  $45  a  ton,  and  the  inferior 
qualities  at  a  lower  price.  The  principal,  and,  as  it  ap- 
pears, a  permanent  cause  of  that  reduced  price  is  well 
known  to  consist  in  the  comparative  price  of  fuel. 

In  Staffordshire,  seven  tons  and  three  quarters  of 
bituminous  coal,  costing  $8  to  $9,  are  necessary  to  con- 
vert the  sufficient  quantity  of  ore  into  a  ton  of  bar  iron. 
It  apjDcars  by  the  evidence  taken  by  the  Committee  on 
Manufactures  in  1818,  that  about  five  hundred  bushels 
of  good  charcoal,  costing  $27,  were  necessary  to  make  a 
ton  of  Juniata  bar  iron.  The  expense  in  New  Jersey 
for  the  same  object  is  stated  at  $42.  The  average  dif- 
ference of  cost  between  charcoal  and  bituminous  coal 
iron  appears  on  that  single  item  to  amount  to  $24  a 
ton.  It  seems  impracticable  that  iron  made  with  char- 
coal can  ever  compete  in  cheapness  with  that  made  with 
bituminous  coal.  To  persevere,  therefore,  in  the  at- 
tempt, through  the  means  of  a  duty  which  exceeds  100% 
on  the  value,  is  to  impose  a  perpetual  tax  on  the  com- 
munity for  that  purpose.  It  is  not  a  temporary  duty 
imposed  under  an  expectation  that  competition  will 
ultimately  reduce  the  price.  After  every  possible  im- 
provement shall  have  been  introduced,  the  utmost  skill 
applied,  and  the  |  rofits  been  reduced  to  the  lowest  rate, 
the  difference  of  price  arising  from  that  in  the  price  of 
fuel  will  still  remain.  A  happy  application  of  anthra- 
cite coal  to  the  manufacture  of  iron,  the  discovery  of 
new  beds  of  bituminous  coal,  the  erection  of  ironworks 
in  the  vicinity  of  the  most  easterly  beds  now  existing, 
and  the  improved  means  of  transportation  Avhich  may 
bring  this  at  a  reasonable  rate  to  the  sea  border,  may 
hereafter  enable  the  American  iron  master  to  compete 


180  ALBERT  GALLATIN. 

in  cheapness  with  foreign  rolled  iron  in  the  Atlantic 
districts.  On  those  contingencies  the  tariff  can  have 
no  effect.  To  persist,  in  the  present  state  of  the  manu- 
facture, in  that  particular  competition,  and  for  that 
purpose  to  proscribe  the  foreign  rolled  iron,  is  to  com- 
pel the  people  to  substitute  for  an  indefinite  time  a  dear 
to  a  cheap  article. 

It  is  said  that  the  British  imported  iron  is  generally 
of  an  inferior  quality  ;  this  is  equally  true  of  a  portion 
of  that  which  is  made  in  America.  In  both  cases,  the 
consumer  is  the  best  judge,  has  an  undoubted  right  to 
judge  for  himself,  and  should  not  be  prevented  by  any 
artificial  means  from  selecting  the  species  he  prefers. 
Domestic  charcoal  iron  should  confine  itself  to  a  com- 
petition with  the  foreign  iron  made  with  the  same  fuel. 
Since  this  is  of  a  superior  quality,  the  object  here 
should  be  to  improve  the  quality.  There  is  no  reason 
why,  by  using  the  proper  means,  American  iron  made 
with  the  same  materials  may  not,  for  most  purposes, 
compete  with  that  imported  from  the  Baltic,  with  a 
protection  which,  including  charges,  would  not  fall 
short  of  $24  a  ton.  In  order,  however,  to  lessen  the 
immediate  effect  of  too  great  a  reduction  of  the  duties 
on  rolled  iron,  your  memorialists  would  respectfully 
suggest  that  the  distinction  now  made,  and  exception- 
able in  other  respects,  between  rolled  and  hammered 
iron,  should  be  abrogated;  and  that  an  equal  duty  of 
about  $14  a  ton,  corresponding  with  a  duty  of  25%  on 
the  value  of  the  whole  amount  of  both  species  now 
imported,  should  indiscriminately  be  laid  on  every 
species.  This  is  one  of  the  cases  in  which  the  duties 
may  be  arranged  with  propriety  and  convenience,  with- 
out varying  materially  from  the  principle  of  a  uniform 
duty. 

Your  memorialists  believe  that  the  ultimate  reduction 
of  the  price  of  American  to  that  of  the  British  rolled 


FREE  TRADE  MEMORIAL.  181 

iron  can  duly,  and  ultimately  will  be  accomplished  in 
that  western  region,  which  abounds  with  ore,  and  in 
which  is  found  the  most  extensive  formation  of  bitu- 
minous coal  that  has  yet  been  discovered  in  any  part  of 
the  globe  ;  and  this  also  lying  so  near  the  surface  of  the 
earth,  as  to  render  the  extraction  of  the  mineral  less 
expensive  than  anywhere  else.  But  a  considerable 
period  of  time  must  elapse  before  the  wants  of  a  po})u- 
lation  that  increases  with  such  unparalleled  rapidity 
can  be  fully  supplied ;  and,  in  the  mean  Avliile,  the  west- 
ern country  is  not,  in  any  degree,  affected  by  the  duties 
on  that  article. 

The  duties  on  hemp,  flax,  and  iron,  are  all  injurious 
to  the  shipping  interest.  Those  paid  on  a  ship  of  five 
hundred  and  seventy  five  tons,  built  in  the  city  of  New 
York  in  the  spring  of  1831,  were  as  follows  :  — 

Hemp,  29,288  lbs.  of  tarred  and  untarred 
cordage $1,199  98 

Flax,  3,337  square  yards  of  canvas    .         .  333  70 

Iron,  22,612  lbs.  cables    .         .     ■    .  678  36 
6,121  lbs.  anchors  .         .         .122  42 
Tons,  17  18  2  5  in  hull  and 
spars,    near    \   Russian,    § 
English       .         .         .         .   576  77 

\,?>11  55 


$2,911  03 
The  same  duties  on  a  ship  of  518  tons  built  in  Bos- 
ton are  rated  at  $2,653  ;  adding  those  on  bolts,  spikes, 
lead,  paint,  oil,  etc.,  which  on  a  vessel  of  that  class 
amount  to  about  $600,  the  total  amount  is  near  $6.25 
a  ton.  Reduced  to  a  duty  of  $14  a  ton  on  the  iron, 
and  of  25%  on  the  other  articles,  they  would  amount 
to  less  than  $2.25.  The  extra  or  protecting  duties  im- 
pose a  tax  of  $4  a  ton  on  all  the  ships  intended  for  the 
foreign  trade  that  are  built  in  the  United  States,    Those 


182  ALBERT  GALLATIN. 

ships  may  be  computed  to  last  ten  years ;  and  the  tax 
on  the  construction,  with  interest  and  insurance,  is 
equivalent  to  an  annual  tax  of  forty-two  cents  a  ton. 
An  equal  sum  must  be  added  for  the  extra  duties  paid 
on  the  purchase  of  new  sails,  and  that  portion  of  the 
annual  expense  that  consists  of  dutied  articles.  This 
annual  tax  of  eighty-four  cents  is  equivalent  to  a  ton- 
nage duty  of  more  than  fifty-six  cents  a  ton  on  each 
voyage,  since  the  whole  registered  tonnage  amounted, 
at  the  end  of  the  year  1829,  to  650, OOO,  and  the  whole 
that  entered  the  ports  of  the  United  States  during  the 
year  18o0,  to  967,000  tons.  From  that  indirect  tonnage 
duty,  foreign  vessels  entering  the  ports  of  the  United 
States  are  exempt  in  whole  or  in  part,  according  to  the 
system  of  duties  adopted  in  the  countries  to  which  they 
belong.  Those  duties  are  much  lower  in  England,  and 
the  vessels  of  the  Hanse  towns  are  not  subject  to  any. 
It  is  only  by  the  greatest  application  of  skill  and  intel- 
ligence, as  well  to  all  the  various  branches  of  industry 
employed  in  shipbuilding  as  to  the  art  of  navigation, 
that  the  United  States  vessels  are  able  to  compete  with 
those  of  every  other  nation.  The  symptoms  of  an  un- 
favorable change  in  the  proportion  between  American 
and  foreign  tonnage  employed  in  the  American  trade, 
and  of  an  actual  diminution  in  that  of  America,  de- 
serve serious  attention,  and  may  be  fairly  ascribed  to 
the  pretended  protecting  system  which  imposes  on  it  an 
annual  tax  of  $540,000.  The  same  protecting  duties  im- 
pose a  similar  tax  on  the  coasting  tonnage,  though  less 
in  proportion,  the  vessels  in  that  branch  using  a  less 
quantity  of  taxed  articles ;  it  falls  on  the  consumer, 
but  does  not  materially  interfere  with  the  American 
navigation. 

The  laws  which  regulate  the  coasting  trade  have,  in 
inutation  of  those  of  all  other  nations,  given  its  monop- 
oly to  the  American  ship  owners,  without  accelerating 


FREE  TRADE  MEMORIAL.  183 

the  increase  of  its  amount.  Such  is  the  situation  of  the 
United  States,  in  relation  to  all  other  countries,  that 
the  effect  of  this  monopoly  has  ever  been,  and  continues 
to  be,  almost  nominal.  It  is  believed  that  the  coasting 
trade  of  the  United  States  might  be  opened  to  all  na- 
tions without  sensibly  affecting  the  American  shipping 
interest ;  and  it  will  be  admitted  that  a  protection 
against  foreign  interference  not  greater  than  that  which 
is  extended  to  every  other  branch  of  American  industry. 
or  a  duty  of  20%  on  the  freight,  would  in  this  instance 
be  prohibitory.  But  the  American  navigation  employed 
in  the  foreign  trade  does  not  require  or  ask  any  special 
protection,  and  complains  only  of  that  inequality  which 
is  produced  by  the  laws  of  the  United  States. 

It  has  been  asserted  that  the  growth  and  prosperity 
of  that  navigation  were  due  to  the  protection  afforded 
by  the  former  discriminating  duties  on  foreign  vessels. 
That  protection  did  not  exceed  that  which  by  the  then 
existing  duties  had  been  given  to  every  other  branch 
of  American  industry ;  and  it  is  notorious  that  its  rapid 
increase  between  the  years  1793  and  1811  Avas  due 
much  more  to  the  general  European  war  and  to  the 
neutrality  of  America  than  to  the  discriminating  duties. 

The  first  complete  return  of  the  registered  tonnage 
is  that  for  the  year  1790,  when  it  amounted  to  346,000 
tons.  Those  returns  are  generally  liable  to  the  same 
objection  as  those  for  the  coasting  tonnage.  The 
amount  of  registered  tonnage  for  the  year  1828  Avas 
stated  at  812,000  tons,  when,  in  reality,  according  to  the 
correction  since  made  at  the  treasury,  it  was  but  656,000 
tons ;  and  there  was  an  actual  decrease  of  6,000  tons 
during  the  year  1829.  In  a  period  of  thirty-nine  years, 
while  the  population  has  more  than  trebled,  the  Amer- 
ican navigation  employed  in  the  foreign  trade  has  only 
increased  88%.  If  we  could  be  tempted  to  argue  in  the 
same  manner  as  some  of  the  advocates  of  restrictions, 


184  ALBERT  GALLATIN. 

we  might  recur  to  the  official  returns  and  assert  that 
in  the  year  1801  the  registered  tonnage  amounted  to 
718,000,  and,  on  account  of  the  treaties  of  Amiens  and 
Luneville,  fell  at  once,  in  the  year  1802,  to  560,000  tons  ; 
but  we  happen  to  know  that  the  amount  was  corrected, 
and  is  truly  stated  for  1802,  whilst  that  stated  for  1801 
and  the  immediately  preceding  years  was  erroneous 
and  exaggerated.  We  have  also  been  informed  that  the 
great  apparent  diminution,  from  the  amount  stated  for 
the  year  1817,  at  809,000,  to  606,000  tons  in  1818,  is 
owing  to  a  similar  correction,  which  took  place  in  the 
last-mentioned  year.  We  then  find  that,  from  1790 
to  1793,  when  the  general  European  war  commenced, 
the  registered  tonnage  had  increased  from  346,000  to 
367,000  tons,  or  at  the  rate  of  7,000  tons  a  year ;  be- 
tween 1793  and  1802,  from  367,000  to  560,000  tons,  or 
at  the  rate  of  more  than  21,000  a  year;  and  between 
1818  and  1828,  from  606,000  to  656,000  tons,  or  at  the 
rate  of  5,000  a  year.  The  comparative  rate  of  inci'ease 
during  the  second  of  those  periods  sufficiently  shows 
the  much  greater  effect  produced  by  the  neutrality  of 
America  during  a  general  war,  than  by  any  other  cause 
Avhatever.  No  comparative  inference  can  be  drawn 
from  the  period  extending  from  1802  to  1818,  as  it  em- 
braces years  of  neutrality,  of  war  with  England  and  of 
general  peace.  The  increase  for  those  fourteen  years 
Avas  only  40,000  tons  ;  but,  notwithstanding  the  general 
incorrectness  of  the  intermediate  returns,  they  show,  at 
least,  that  there  had  been  a  continued  and  great  increase 
as  late  as  the  year  1811,  the  return  for  which  was,  it  is 
believed,  also  corrected.  A  still  more  forcible  view  of 
the  subject  is  exhibited  in  the  comparative  amount  of 
American  and  foreign  tonnage  annually  entered  into  the 
ports  of  the  United  States,  from  the  year  1790  to  this 
day,  respecting  which  reference  is  made  to  the  returns 
and  reports  already  before  Congress. 


FBEE  TRADE  MEMORIAL.  185 

But  the  discriminating  duties  were  not  at  all  intended 
for  the  purpose  of  excluding  foreign  navigation  from  a 
fair  and  equal  competition  with  that  of  the  United 
States,  in  the  transportation  of  the  objects  of  commerce 
between  them  and  foreign  countries.  Those  duties  were 
avowedly  retaliatory,  and  intended  for  the  purpose  of 
inducing  those  nations  to  repeal  the  duties  of  a  similar 
nature,  which  they  had  imposed  on  the  American  navi- 
gation. Their  sole  object  was  "free  trade;"  and  the 
object  has  been  attained,  because,  in  that  case,  the  means 
are  adapted  to  the  purpose,  inasmuch  as  the  retaliation 
operates  directly  on  the  subject  of  contention.  Treaties 
or  arrangements,  founded  on  reciprocity,  and  establish- 
ing a  perfect  equality,  have  been  substituted  to  the  dis- 
criminating duties,  by  which  that  object  was  but  imper- 
fectly obtained.  When  the  complaint  is  made  that  this 
happy  state  of  things  is  disturbed,  and  that  an  inequality 
injurious  to  American  industry  is  the  result  of  the  acts 
of  our  own  Legislature,  the  restrictionists,  who  consider 
their  panacea  as  a  universal  remedy,  coolly  answer  that 
further  protection  shall,  if  desired,  be  extended  to  the 
American  navigation ;  that  is  to  say,  that,  still  leaving 
the  evil  now  complained  of  to  operate,  the  discriminat- 
ing duties  which  cannot  remove  it  shall  again  be  rein- 
stated, and  the  convenient  existing  compacts  shall  be 
abrogated. 

The  duties  on  woollen  manufactures  in  general,  were, 
by  the  tarilf  of  1816,  fixed  at  the  rate  of  25%  for  the 
term  of  three  years,  after  which  they  were  to  be  reduced 
to  20%  ;  but  this  last  limitation  was,  in  1818,  postponed 
till  the  year  1826.  Blankets,  worsted  or  stuff  goods, 
and  unmanufactured  wool,  remained  subject  to  the  duty 
of  15%  ad  valorem. 

By  the  tariff  of  1824,  the  duty  was  raised  to  25%  on 
worsted  stuff  goods  and  blankets  ;  and  to  33^%  on 
flannels  and  baizes  of  any  price,  and  on  all  other  manu- 


186  ALBERT  GALLATIN. 

factures  of  wool,  the  prime  cost  of  which  exceeded  33| 
cents  per  square  yard ;  those  not  exceeding  that  price 
remained  charged  with  the  duty  of  25%.  By  the  same 
law,  the  duty  on  wool,  uniuanufactured,  was  raised  to 
20%,  increasing  after  two  years  to  30%  ad  valorem, 
but  that,  the  prime  cost  of  which  did  not  exceed  ten 
cents  per  pound,  remained  charged  with  the  duty  of 

15%. 

Wool  had  never  been  imported  free  of  duty;  and 
Avhen  that  on  woollen  manufactures  was  being  increased 
by  the  tariff  of  1824,  it  was  natural  for  the  agriculturists, 
whose  interest  has,  in  every  country,  so  often  been  sacri- 
ficed to  the  combinations  of  manufacturers,  to  seek  an 
indemnity  in  a  protecting  duty  on  the  corresponding 
agricultural  product.  That  fixed  by  the  tariff  of  1824 
was  also  below  the  average  rate  of  duties,  and  no  other- 
wise objectionable  than  as  a  tax  on  a  raw  material. 
Experience,  however,  soon  proved  that  this  measure 
was  founded  in  error,  and  had  depressed  instead  of  pro- 
moting the  manufacture  intended  to  be  protected. 

The  manufacturers,  examined  by  the  Committee  on 
Manufactures  in  1828,  generally  agreed  in  stating  that 
their  business  was  in  a  more  flourishing  state  before 
than  since  the  tariff  of  1824 ;  and  that  the  unfavorable 
change  was  in  a  great  degree  due  to  the  increased  duty 
on  wool.  Some  of  them  asserted  that  they  could  manu- 
facture cloth  as  cheap  as  in  England,  })rovided  they 
could  obtain  the  raw  material  on  the  same  terms.  This 
should,  it  seems,  have  pointed  out  the  true  remedy. 
That  adopted  by  the  restrictionists  was,  first,  to  impose 
on  the  lower-priced  coarse  wool,  which  this  country 
does  not  produce,  and  had  been  excepted  from  the  pro- 
visions of  the  tariff  of  1824,  a  duty  varying,  in  inverse 
ratio  of  the  prime  cost,  from  90%  to  150%,  and,  of  all 
the  other  species,  a  duty  varying,  in  the  same  inverse 
ratio,  from  more  than  50%  to  90%  ;  and,  secondly,  to 


FBEE  TRADE  MEMORIAL.  187 

raise  the  duties,  particularly  on  flannels,  baizes,  and 
cloth  of  every  description,  to  a  rate  corresponding  with 
that  on  the  wool,  in  some  instances  exceeding  200%, 
and  on  the  uniform  principle  that  the  coarsest  a:id 
cheapest  articles  should  be  charged  with  the  highest 
duty  in  proportion  to  their  value.  It  does  not  appear 
that  a  true  and  efficacious  remedy  can  be  found  against 
that  intolerable  grievance,  without  either  modifying  and 
considerably  lessening  the  duty  on  wool,  or  abandoning 
altogether  the  woollen  manufacture. 

The  profit  on  raising  sheep  must  de]iend  on  the  cost 
of  winter  feeding,  the  price  of  the  meat,  and  the  quality 
of  the  wool.  The  severity  of  our  winters  gives  an  ad- 
vantage, in  the  first  respect,  to  many  countries,  and 
jjarticularly  in  England.  As  mutton  can  be  used  only 
as  fresh  meat,  its  consumption  and  price  uniformly 
depend  on  the  vicinity,  the  number  and  the  population 
of  towns  and  villages  ;  and  that  item  forms,  accordingly, 
a  much  less  portion  of  the  profit  in  the  greater  part  of 
the  United  States  than  in  most  parts  of  Europe.  It 
will,  it  is  believed,  be  universally  admitted  that  sheep 
cannot  be  profitably  raised  in  the  United  States,  unless 
the  price  of  the  most  common,  or  what  is  called  native 
wool,  be  at  least  twenty  to  twenty-five  cents  the  pound. 
Flannels,  therefore,  and  the  coarser  kinds  of  cloth,  never 
can  be  afforded  at  a  reasonable  price  by  the  American 
manufacturer,  unless  the  low-priced  wool  with  which 
those  articles  are  made  everywhere  else,  and  which  can- 
not be  profitably  raised  in  America,  shall  be  imported 
free  of,  or  under  a  very  moderate  duty.  These  are  the 
species  which  now  pay  from  90%  to  150%  on  the  value. 
The  prime  cost  of  Smyrna  wool  is  less  than  ten,  and 
that  of  Buenos  Ayres  less  than  four  cents  a  ]jound. 
They  now  pay,  at  those  rates,  nine  cents  and  six  cents, 
respectively. 

It  is  evident  that  the  only  means  by  which  the  raising 


188  ALBERT  GALLATIN. 

of  sheep  can  be  rendered  truly  profitable  is  by  im- 
proving the  breed,  and  the  quality  of  the  wool.  This 
is  what  has  been  done  in  Prussia,  several  parts  of  Ger- 
many, and  particularly  Saxony,  under  a  climate  as  severe 
as  that  of  the  Middle  States  ;  and,  in  many  instances,  in 
districts  where  nearly  the  whole  profit  arises  from  the 
sale  of  the  wool.  This  has  also  been  done  without  any 
special  protection,  and  with  such  complete  success  as  to 
rival,  and  in  the  finest  kinds  to  supersede  in  foreign 
markets,  the  first-rate  wools  of  every  other  country. 
There  is  no  reason  why  the  same  result  may  not  be  ob- 
tained in  the  United  States  by  the  same  means.  There 
is  no  reason  why  the  American  farmers,  decidedly 
superior  in  intelligence  and  activity,  should  not  succeed 
as  well  as  the  inhabitants  of  a  country  which  enjoys  no 
superior  advantage  in  any  other  respect.  All  that  is 
requisite  is  that  they  should  apply  their  skill  to  objects 
within  their  reach,  and  attend  to  quality  rather  than  to 
quantity.  When,  through  the  artificial  aid  of  a  duty 
which,  including  the  charges  on  importation,  amounts 
in  every  instance  to  more  than  60%,  sheep  are  suddenly 
multiplied,  without  much  regard  to  the  quality  of  the 
wool,  the  superabundant  quantity  soon  gluts  the  home 
market;  and  as,  so  long  as  no  improvement  has  been 
made  tending  to  reduce  the  cost  of  production,  it  cannot 
be  exported  with  profit,  a  great  and  ruinous  depression  of 
price  necessarily  follows.  We  find,  accordingly,  that 
notwithstanding  the  exorbitant  duty  on  importation, 
the  price  of  American  wool,  as  taken  from  the  New 
York  prices  current,  was  lower  in  the  years  1828  and 
1829,  and  during  the  first  part  of  the  year  1830,  than  it 
had  been  during  the  preceding  years. 


FREE  TRADE  MEMORIAL. 


189 


Ybabs. 

Merino. 

Native. 

1826  .... 

35  to  62i 

aver. 

48 

28  to  38       aver. 

30 

1827  .... 

30   -  45 

— 

40 

20-30 

25 

1828  .... 

30  -  45 

— 

41 

18-30 

24 

1829  .... 

32  -  38 

- 

34 

18-25 

2U 

1830,  Jan.  to  June 

30  -  40 

- 

i^ 

16  -  25 

19+ 

-     July  to  Dec. 

35  -  60 

- 

46 

20-30 

25 

1831  .... 

35  -  70 

— 

54i 

20-35 

27i 

The  late  rise  will  not,  from  present  appearances,  last 
long;  and  frequent  depressions  are  the  necessary  con- 
sequences of  an  illusory  encouragement,  and  a  single 
and  limited  market. 

When  we  are  told  of  the  consumption  of  woollen  goods 
in  the  United  States  amounting  annually  to  $60,000,000 
or  $70,000,000,  this  includes  not  only  all  that  is  im- 
ported, but  that  large  quantity  of  household  manufac- 
tures with  which  five-sixths  of  the  population  of  the 
United  States,  at  least  north  of  the  Potomac  and  Ohio, 
have  always  been  clothed.  These,  made  of  the  native 
wool,  within  the  families  of  the  farmers,  are  in  fact 
"so  much  saved,"  and  far  more  important,  useful,  and 
profitable,  than  all  the  recent  factories;  but  they  are 
neither  affected  by  the  price  of  wool,  nor  form  any  part 
of  the  home  market  for  it.  The  following  table  shows 
the  average  annual  value  of  the  imported  woollen  goods, 
of  every  description,  Avhich  have  been  consumed  in  the 
United  States  during  the  last  ten  years,  viz. :  — 


Tears. 

Flannels. 

Cloths  and 
Casimeres. 

All  other. 

Total. 

1821-1824 
1825-1828 
1829-1830 

1 

6,002,000 
4,378,000 
3,224,000 

2,980,000 
3,849,000 
2,708,000 

8,988,000 
8,808,000 
6,121,000 

639,000 
189,000 

190  ALBERT  GALLATIN. 

The  manufacturing  establishments  cannot,  at  most, 
have  increased  their  supply  beyond  the  void  occasioned 
by  the  decrease  of  foreign  imports,  or  about  .ii!;>,()()(>,00() 
a  year,  and  probably  much  less  ;  as  it  is  very  improbable 
that,  under  highly  increased  prices,  and  with  substitutes 
at  hand,  the  consumption  of  woollen  goods  should  not 
have  been  considerably  diminished.  If  they  have  sui)er- 
seded  any  ]iortion  of  the  household  manufactures,  this 
has  not  increased  the  quantity  of  wool  required.  That 
wanted  for  the  increased  supply  of  $3,000,000  worth  of 
imported  goods,  chiefly  broadcloths  and  casimeres,  and 
which  the  manufacturers  probably  sell  for  $1,000,000 
more  than  the  imported  articles  would  have  been  sold  for 
under  the  former  25%  (^l^^ty,  cannot  exceed  6,000,000 
l)0unds  ;  of  which  1,000,000  pounds  a  year  was  still 
imported  in  the  years  1829-1830 ;  5,000,000  pounds  is, 
therefore,  the  utmost  amount  of  the  increased  supply 
of  domestic  wool  for  which  the  manufacturing  estab- 
lishments have  given  a  market  since  the  year  1824. 

The  object  of  the  wool-growers  is,  that  that  market 
should  be  enlarged ;  but  this  cannot  be  done  effectually, 
unless  the  domestic  manufacture  is  firmly  established ; 
and,  for  that  purpose,  it  is  necessary  that  the  raw  ma- 
terial should  be  obtained  on  reasonable  terms.  To 
enhance  its  price  by  persevering  in  the  existing  ex- 
orbitant duties,  is  not  less  inconsistent  with  sound 
policy  than  with  justice.  It  is  impossible  that  the 
present  system  of  minimums  can  be  sustained ;  and  it 
is  the  true  interest  of  all  the  parties  concerned  that  the 
duties  on  wool,  as  well  as  on  the  manufactures  of  wool, 
should  be  considerably  reduced.  A  domestic  manufac- 
ture may  often  be  advantageously  prosecuted,  though 
the  raw  material  should  at  first  be  procured  from  abroad. 
Throstling  mills  are  already  established,  which  are  em- 
idoyed  on  foreign  silk.  It  is  not  perceived  that  there 
is  any  more  difficulty  in  establishing  silk  than  woollen 


FREE  TRADE  MEMORIAL.  191 

manufactiires ;  and  if  this  was  successfully  attempted, 
it  would  be  a  most  wretched  policy  to  lay  a  duty  on 
foreign,  in  order  to  encourage  the  cultivation  of  domestic 
silk,  although  every  one  acknowledges  the  practicability 
and  high  importance  of  adding  this  to  our  agricultural 
products.  The  value  of  the  hides  and  raw  skins  im- 
ported free  of  duty,  and  consumed  in  the  United  States, 
has  for  the  last  nine  years  exceeded  $1,800,000  a  year. 
It  is  evident  that  if,  in  order  to  protect  the  raising  of 
American  cattle  by  giving  an  additional  value  to  the 
hide,  a  high  duty  had  been  laid  on  those  imported,  the 
domestic  manufacture  of  leather  in  all  its  branches, 
instead  of  being  in  its  present  flourishing  state,  would 
have  been  most  materially  injured,  and  we  shoiild  have 
been  obliged  either  to  import  from  Europe,  or  to  pur- 
chase at  exorbitant  prices,  all  those  articles  which  it 
now  supplies  at  a  moderate  rate.  Tlie  reduction  in 
England  of  the  duty  on  foreign  wool  to  four  cents  a 
pound  has  caused  a  fall  in  the  price  of  woollen  goods, 
without  injuring  the  wool-grower  at  home.  The  free 
introduction  of  the  species  not  raised  here  would,  by 
encouraging  the  manufacture  generally,  ultimately  en- 
large the  market  for  the  domestic  wool.  It  is  the  only 
way  to  introduce  the  manufacture  of  blankets,  and  to 
reduce  the  price  of  home-made  flannels  and  of  the  coarser 
species  of  cloth. 

The  manufacturers  asserted,  in  1828,  that  they  were 
materially  injured  by  an  extraordinary  influx  of  foreign 
goods,  which  has  been  shown  not  to  have  taken  place, 
and  by  presumed  frauds  on  the  revenue,  of  the  existence 
of  which  at  that  time  no  evidence  has  ever  been  given ; 
and  they  declared  that  the  domestic  manufacture  could 
not  be  efficiently  protected  unless  the  imported  woollen 
goods  were  charged  with  a  specific  duty.  The  extraor- 
dinary system  of  minimums  grew  out  of  that  sugges- 
tion.    l>y  the  tariff  of  1828,  the  duty  on  blankets  and 


192  ALBERT  GALLATIN. 

hosiery  was  raised  to  35%  ad  valorem ;  worsted  goods 
remained  at  25%  ;  a  specific  duty  was  laid  on  carpets, 
e(|uivalent  to  an  ad  valorem  duty  of  about  60%  ;  and 
that  on  ready-made  clothing,  and  on  the  other  woollen 
manufactures,  the  prime  cost  of  which  exceeds  $4  the 
square  yard,  was  increased  to  50%  on  the  value.  All 
the  other  manufactures  of  wool,  or  of  which  wool  is  a 
component  part,  were  divided  into  five  classes,  on  which, 
although  the  name  of  a  duty  of  45%  ad  valorem  was 
preserved,  the  following  specific  duties  per  square  yard 
were  respectively  laid :  — 

1.  On  those,  except  flannels  and  baizes,  the  prime 
cost  of  which  does  not  exceed  33J  cents  the  square  yard, 
14  cents. 

2.  On  all  flannels  and  baizes,  the  prime  cost  of  which 
does  not  exceed  50  cents,  and  on  all  other  goods  the 
prime  cost  of  which  is  from  33J  to  50  cents  the  square 
yard,  22^  cents. 

3.  On  all  those,  the  prime  cost  of  which  is  from  50 
cents  to  $1  the  square  yard,  45  cents. 

4.  On  all  those,  the  prime  cost  of  which  is  from  f  1 
to  $2.50  the  square  yard,  $1.12i. 

5.  On  all  those  the  prime  cost  of  which  is  from  $2.50 
to  $4  the  square  yard,  f  1.80. 

Those  several  rates  are  equivalent  to  ad  valorem 
duties,  varying,  in  the  first  class,  from  about  80  to  42%, 
in  the  second,  including  baizes  and  flannels,  from  200, 
in  the  third  from  90,  in  the  fourth  from  112 J,  and  in 
the  fifth  from  72  to  45%.  The  duty  is,  in  each  class, 
invariably  laid  in  inverse  ratio  of  the  prime  cost,  that 
is  to  say,  that,  in  each  class  respectively,  the  lowest 
priced  cloth  is  charged  with  the  highest  duty.  Flan- 
nels and  baizes  were  excepted  from  the  first  class,  in 
consequence  of  which  the  cheapest  sorts  are  charged 
with  a  duty  equivalent  on  the  low  priced  flannels  to  100, 
and  on  the  cheapest  baizes  to  more  than  200%. 


FREE  TRADE  MEMORIAL.  193 

It  is  easily  perceived  that  the  true  object  of  that  out- 
rageous system  was  not,  as  was  alleged,  to  prevent  frauds, 
but  to  give  to  the  manufacturer  the  exclusive  monopoly 
of  the  lower  priced  woollen  goods  in  each  class  respec- 
tively. So  far  from  preventing  frauds  on  the  revenue, 
the  temptation  to  commit  them  has  evidently  been 
greatly  increased  by  that  system ;  and  there  is  the  same 
difficulty  in  determining  by  an  appraisement  the  class  to 
which  the  imported  article  belongs,  as  there  was  before 
in  ascertaining  the  value.  Specific  duties  can  be  laid 
only  on  commodities  which  are  nearly  of  the  same 
value,  or  between  the  several  species  of  which  there  is 
an  obvious  and  distinct  difference. 

The  woollen  tariff  of  1828  is  the  masterpiece  of  the 
ultra  restrictionists,  and  exhibits  all  the  worst  features 
of  the  system.  The  most  conspicuous  is  the  total  and 
blind  disregard  for  every  other  consideration,  for  any 
other  interest  but  that  of  the  privileged  manufacture. 
After  having  made  certain  classes  at  random,  without 
the  least  inquiry  whether  the  manufacturer  was  able  or 
prepared  to  supply  the  species  in  each  class  of  which 
that  arrangement  gave  him  the  monopoly  ;  after  having 
sacrificed,  without  mercy,  the  poorer  classes  of  society, 
and  compelled  the  less  wealthy  in  each  class  to  purchase 
the  more  expensive  kinds  of  cloth,  which,  coming  nearer 
the  minimum,  could  alone  be  imported;  after  having 
blindly  neutralized,  by  the  exorbitant  duty  on  wools, 
the  benefits  intended  to  be  conferred  on  the  American 
manufacturer,  it  is  not  astonishing  that  no  attention 
should  have  been  paid  to  the  vexations  and  losses  im- 
posed on  the  American  importer,  to  the  comparative 
advantages  resulting  to  the  foreign  importing  manu- 
facturer, and  to  the  demoralizing  effect  of  the  law. 

The  return  of  a  general  peace  necessarily  gave  to  the 
subjects  of  foreign  nations  a  share  in  the  importing 
commerce  of  the  United  States.     The  British  manufac- 


194  ALBERT  GALLATIir. 

tiirer,  particularly,  is  anxious  to  send  abroad,  without 
calculating  or  regarding  the  wants  of  the  country  to 
which  he  exports,  all  the  goods  for  which  his  home 
market  and  the  regular  foreign  demands  do  not  afford  a 
vent,  and  which  he  cannot,  without  great  injury  to  him- 
self, keep  beyond  a  certain  time.  This  irregular  trade 
promoted,  and  in  its  turn  has  been  greatly  encouraged 
by  the  general  system  of  public  auctions.  The  impor- 
tations from  England  were,  before  the  tariff  of  1828, 
about  equally  divided  between  the  American  importer 
and  the  British  manufacturer,  who,  though  the  whole 
amount  of  the  woollen  branch  is  curtailed,  engrosses 
now  more  than  two  thirds  of  what  is  still  imported. 
This  was  an  unavoidable  consequence,  both  because  he 
pays  less  regard  to  the  loss  arising  from  an  improvident 
importation,  and  on  account  of  the  strong  temptation 
under  the  system  of  minimums  to  undervalue  the  mer- 
chandise. Under  moderate  duties  ad  valorem,  frauds 
on  the  revenue  of  that  description  are  rare,  because  a 
great  alteration  is  easily  detected,  and  the  illegitimate 
profit  made  by  one  that  may  escape  detection  is  incon- 
siderable. But,  when  by  such  as  the  most  vigilant  and 
skillful  appraisers  or  other  officers  find  it  extremely 
difficult  to  ascertain,  and  respecting  which  they  often 
differ,  the  goods  are  thrown  into  the  next  inferior  class, 
and  a  profit  of  $1  made  on  the  running  yard  of  broad- 
cloth, those  over  whom  we  have  no  control,  and  who 
may  be  destitute  of  principle,  will  make  the  attempt. 

With  the  most  earnest  desire  that  frauds  shoidd  be 
prevented,  your  memorialists  will  however  observe,  that 
the  effect  of  those  which  have  been  committed,  and 
which  they  have  no  wish  to  disguise,  has  not  been  to 
reduce  the  price  of  the  goods,  and  in  that  respect  to 
lessen  the  protection  given  by  the  tariff  to  the  manu- 
facturers. The  amount  ascertained  is  comparatively 
small,  and  the  cloths  fraudulently  underrated  have  been 


FREE  TRADE  MEMORIAL  195 

sold  at  the  same  rate  as  those  of  similar  qualities  which 
were  fairly  imported.  These  have  been  sold  with  some 
profit  in  spite  of  the  high  duty  ;  and  no  other  general 
reduction  in  the  price  of  woollen  goods  has  taken  place 
in  the  United  States,  than  that  which  has  been  the  con- 
sequence of  the  fall;  during  the  two  last  years,  in  the 
price  of  the  British  manufacture, — a  fall  due  to  the 
combined  effect  of  a  lessened  demand,  and  of  the  free 
importation  of  foreign  wool  in  that  country.  But  the 
existing  laws  are,  under  the  protecting  system,  equally 
vexatious  to  the  fair  imj)orter,  and  inefficient  for  the 
prevention  of  frauds. 

The  great  revenue  derived  from  duties  on  importa- 
tions, had  heretofore  been  collected  with  facility  and 
the  utmost  fidelity.  This  result,  almost  exclusively 
due  to  the  probity  of  the  American  merchants,  to  the 
sanctity  of  oaths,  and  to  the  moral  feeling  of  the  coun- 
try, does  not  seem  to  have  been  sufficiently  appreciated. 
The  new  regulations  are  general :  each  package  must 
contain  none  but  goods  of  the  same  value  ;  but  passing 
over  this,  and  others  of  a  similar  nature,  which  can 
hardly  be  carried  strictly  into  effect,  the  American 
importer,  of  the  most -unblemished  character,  is  liable 
to  the  insufferable  grievance  of  having  his  goods  sub- 
jected to  a  critical  and  very  uncertain  appraisement  of 
their  presumed  value  abroad,  after  having  been  required 
to  declare,  under  the  solemnity  of  an  oath,  the  price  at 
which  they  were  actually  purchased.  On  the  other 
hand,  merchandise  is  imported  on  foreign  account,  to 
order  as  it  is  called,  when  the  nominal  consignee  can 
only  certify  that  he  has  no  other  invoice  than  that  pro- 
duced at  the  custom-house ;  and  nothing  is  required 
from  the  owner  or  his  real  agent.  It  is  impossible  to 
place  reliance  on  the  valuation  given  by  parties  inter- 
ested, over  whom,  personally,  neither  the  laws  or  public 
opinion  have  any  control,  and  who  are  not  bound  to  the 


196  ALBERT  GALLATIN. 

country  by  any  tie  of  patriotism  or  common  interest. 
The  requirement  of  oaths  and  the  system  of  appraise- 
ments are  irreconcilable.  If  no  other  remedy  can  be 
devised,  it  would  be  preferable  either  to  have  all  the 
imported  merchandise  appraised  according  to  its  value 
in  the  port  of  importation,  provided  uniformity  of  valu- 
ation in  the  several  seaports  can  be  secured;  or,  as  is 
said  to  answer  the  purpose  in  other  countries,  to  let  the 
importer  declare  the  value,  with  the  reserved  right  to 
government  to  take  the  goods  at  a  small  advance  upon  it. 
These  difficulties  might  all  be  avoided  by  an  abandon- 
ment of  the  system  of  high  duties.  Yet,  frauds  may 
be  prevented  by  a  rigorous  inspection,  and  provision 
may  be  made  against  mere  evasions.  There  can  be  no 
difficulty  in  preventing  the  importation  by  a  merchant, 
of  bar  iron  under  some  disguised  name  or  form,  or 
by  a  manufacturer,  of  ready  dyed  woollen  yarn,  which 
happens  to  pay  a  less  duty  than  wool.  What  is  only 
an  imperfection  in  the  system  may  be  corrected.  But 
there  are  certain  limits  in  the  rate  of  duties  which  no 
government  ever  can  exceed  with  impunity.  If  fraud 
has  been  suppressed,  smuggling  invariably  takes  place, 
whenever  the  risk  of  seizure,  added  to  the  ordinary 
charges  of  importation,  is  less  than  the  difference  be- 
tween the  respective  prices  at  the  place  whence  imported 
and  that  at  which  the  smuggled  article  is  delivered. 
That  risk  is  calculated  in  the  same  manner  and  with 
more  certainty  than  that  of  capture  in  time  of  war.  In 
all  countries  Avhere  the  prohibitory  system  prevails,  the 
business  is  properly  subdivided  and  carried  on  as  regu- 
larly as  any  other ;  and  the  advance  paid  by  the  im- 
porting merchant  on  the  prime  cost  is  known  to  every- 
body, and  designated  by  the  name  of  "premium  on 
contraband."  The  insular  situation  of  Great  Britain, 
and  the  "  preventive  service  "  in  which  a  portion  of  her 
naval  force  is  employed,  have  not  protected  her  against 


FREE  TRADE  MEMORIAL.  197 

that  evil,  to  which  no  efficient  remedy  can  be  found  but 
a  reduction  of  the  duty.  We  may  affirm  from  an  au- 
tlientic  source,  that,  according  to  the  calculation  of 
those  who  have  the  best  means  of  information,  not  more 
than  one  half  of  the  French  brandy  consumed  in  Eng- 
land pays  the  duty. 

In  France,  the  number  of  persons  employed  in  the 
collection  of  the  customs,  consisting  principally  of  in- 
spectors or  tide  waiters,  or  those  who  perform  the  same 
duties  on  the  land  frontier,  has  been  officially  stated 
to  amount  (deducting  3,000  employed  on  the  salt  ex- 
cise) to  more  than  23,000.  The  premium  on  smuggling 
generally  varies  according  to  the  value  of  the  article, 
from  5  to  25%.  It  has  been  repeatedly  acknoAvledged, 
and  its  amount  stated  by  the  organs  of  the  government, 
in  their  official  communications  to  the  legislative  body. 
More  than  four  fifths  of  the  finer  sorts  of  spun  cotton 
used  by  the  French  fabrics  of  muslin  are  smuggled  from 
abroad;  and  government,  as  a  proof  of  its  vigilance, 
asserted  that  the  premium  paid  by  the  manufacturer 
had  been  raised  on  that  article  from  25  to  40%.  It  may 
be  added  that  fifty  years  ago  the  number  of  persons  em- 
ployed in  suppressing  contraband  in  France  amounted, 
as  now,  to  23,000  ;  and  that  a  minister  who,  so  far  from 
belonging  to  what  is  called  the  modern  school  of  theorists 
was  desirous  to  prevent,  as  far  as  practicable,  the  intro- 
duction of  foreign  manufactures,  considered  a  duty  of 
15%  ad  valorem  as  the  limit  beyond  which  illicit  impor- 
tations could  not  be  prevented.  The  facts  are  notorious, 
denied  by  no  one,  and  occur  whenever  the  duties  are  too 
high.  If  inquiry  is  made,  why  then  a  duty  equal  to 
the  premium  is  not  substituted,  the  uniform  answer  is, 
that  the  combination  of  the  persons  interested  is  too 
powerful :  in  England,  the  West  India  interest,  and  the 
Scotch  distilleries  ;  in  France,  the  union  of  the  various 
manufacturers,  and  sometimes  of  certain  descriptions  of 


198  ALBERT    GALLATIN. 

landholders.  Thus,  when  it  was  lately  suggested  by 
the  iron-masters  of  the  northern  departments  that  the 
prohibitory  duty  on  iron  might  be  reduced,  provided 
that  on  the  coal  of  Belgium  was  repealed,  this  was 
successfully  opposed  by  the  owners  of  forests  in  the 
vicinity,  and  of  distant  coal  mines,  who  declared  that 
no  measure  could  be  more  ruinous  to  France  ;  whence 
it  may  be  concluded  that  the  acquisition  of  Belgium 
would  have  been  a  great  misfortune  to  her.  But  if  it 
is  asked,  why  the  manufacturers  prefer  the  prohibition 
to  a  duty  equal  to  the  premium  on  smuggling,  it  is  be- 
cause they  know  that  the  amount  fairly  imported  is,  on 
payment  of  the  same  duty  or  premium,  always  greater 
than  that  which  is  smuggled  ;  and  that,  callou^s  to  any 
other  consideration  than  their  own  interest,  they  are 
careless  of  the  effect  produced  on  the  habits  of  those 
actually  employed  in  smuggling,  and  on  the  moral  feel- 
ing of  the  community.  Those  habits  may  engender  as 
many  crimes  as  the  game  laws ;  custom-house  oaths 
may  be  daily  violated,  and  become  a  by-word  ;  still  the 
protecting  system  must  be  preserved. 

The  extensive  land  and  sea  frontier  of  the  United 
States  offers  more  facilities  for  smuggling  than  are 
found  in  almost  any  other  country  ;  and  unless  sus- 
tained by  the  community,  government  will  find  itself 
unable  to  prevent  it.  Public  opinion  and  reverence  for 
the  law  may,  for  a  short  time,  prevent  the  evil  from 
reaching  its  full  extent ;  most  American  merchants 
would  rather  withdraw  from  business  than  receive  goods 
on  which  the  duties  had  not  been  paid.  But  their  place 
will  be  filled  by  others  less  scrupulous.  If  cupidity 
could  induce  even  Americans  to  engage  in  that  most 
nefarious  of  all  inirsuits,  the  slave  trade,  adventurers 
will  never  be  wanting  to  carry  on  an  illegal  trade  when- 
ever it  ceases  to  be  disgraceful  in  public  opinion.  It 
affords  no  apology  to  the  offender ;  but  government  is 


FRJEE  TRADE  MEMORIAL.  199 

responsible  for  the  offenses  wliicli  are  the  necessary- 
consequences  of  its  legislation,  and  that  system  cannot 
be  too  much  reprobated  which  has  an  unavoidable  ten- 
dency to  corrupt  the  moral  feeling  of  the  community. 

The  cultivation  of  sugar  in  Louisiana  was  not  due  to 
any  special  protection,  but  greAv  out  of  that  which  was 
incidentally  given  by  the  revenue  duty  of  two  cents  and 
a  half  per  pound.  An  additional  encouragement  was 
unfortunately  given  in  1816  by  raising  it  to  three  cents. 
Whatever  may  be  the  difference  of  opinion  on  that 
subject,  the  statements  given  by  the  })lanters  and  laid 
before  Congress  are  perfectly  fair,  and  give  all  the 
necessary  information.  It  appears  clearly  that,  with 
the  exception  j)erhaps  of  the  most  southerly  part  of  the 
State,  the  climate  renders  that  cultivation  so  precarious 
that  without  the  assistance  of  a  protecting  duty  it 
cannot  be  carried  on  profitably.  The  expenses,  even  in 
seasons  that  were  not  unfavorable,  are  stated  at  three 
cents  and  a  half  a  pound.  The  great  value  assigned  to 
the  capital  laid  out,  and  which  consists  almost  exclu- 
sively of  land  and  slaves,  is  clearly  due  to  that  particular 
cultivation  and  to  the  duty  in  which  it  originated.  But  if 
that  value  was  even  reduced  to  one  half  of  the  estimate; 
if  the  slaves,  instead  of  .f  GOO,  were  only  valued  at  $300, 
which  was  probably  the  price  actually  paid  by  Louisi- 
ana, it  appears  quite  improbable  that,  with  the  excep- 
tions already  made,  the  profits  should  be  sufficient  to 
enable  the  planter  to  persevere,  without  the  assistance 
of  some  duty,  in  raising  sugar,  during  the  general  de- 
pression in  the  price  of  that  commodity. 

The  annual  average  quantity  of  imported  brown  and 
clayed  sugar,  on  which  the  duty  was  collected  during 
the  years  1826-18.30,  amounts,  after  deducting  the 
drawbacks,  to  65,000,000  pounds.  The  average  crop  of 
Louisiana  during  the  same  |)eriod  of  years,  does  not 
appear  to  have  amounted  to  60,000,000.     There  is  not 


200  ALBERT  GALLATIN . 

the  slightest  probability  that  the  quantity  "wanted  for 
the  consumption  of  the  growing  population  of  the 
United  States  can  at  anytime  be  supplied  by  Louisiana, 
and  the  other  districts  where  the  cultivation  of  the  sugar 
cane  may  be  forced.  Should  it  reach  that  point  by  a 
temporary  increase,  much  more  rapid  than  that  of  the 
population,  it  would  be  but  for  a  short  period.  But  not 
even  during  such  period,  or  at  any  other  time,  would 
the  price  paid  by  the  community  be  reduced,  since  this 
could  only  be  effected  by  a  reduction  in  the  cost  of  pro- 
duction, which  is  impracticable. 

The  question  therefore  is,  whether,  when  this  high 
duty  is  no  longer  wanted  for  the  purpose  of  revenue,  a 
tax  amounting  now  to  100%  on  the  value,  and  in  the 
whole  to  more  than  $2,000,000  on  an  article  of  food, 
which  as  a  necessary  of  life  stands  next  to  bread  and 
meat,  shall  be  laid  in  perpetuity  on  the  people  of  the 
United  States,  in  order  to  render  the  labor  of  twenty 
thousand  slaves  more  profitable  to  their  owners  than  if 
applied  to  some  other  species  of  cultivation,  or  than 
slave  labor  is  in  any  other  State.  It  must  be  admitted 
that  the  repeal  of  the  duty  woiild  be  ruinous  to  those 
who  have  made  investments  in  lands  and  slaves,  since 
the  artificial  rise  in  their  value  has  taken  place  ;  but 
that  is  the  whole  extent  of  the  evil.  It  bears  no  com- 
parison with  the  national  loss  paid  by  the  consumer, 
which  a  continuation  of  the  duty  would  perpetuate.  It 
would  in  this,  as  in  many  other  cases,  be  much  cheaper 
to  indemnify  the  parties  interested,  than  to  persevere 
in  fostering  a  branch  of  industry,  in  the  prosecution  of 
which,  to  use  the  expression  of  the  planters,  they  are 
"  warring  against  nature."  It  is  not,  however,  proposed 
to  repeal,  but  to  reduce  the  duty  to  a  rate  nearly  ap- 
proaching that  of  a  general  uniform  duty  ad  valorem  ; 
and  in  doing  this  we  would  not  take  as  a  criterion  the 
present  depressed  price  of  sugar,  —  a  price  which  ap- 


PBEE  TRADE  MEMORIAL.  201 

pears  to  be,  even  iu  the  West  Indies,  below  the  cost  of 
production. 

According  to  the  Treasury  statements  of  commerce, 
the  average  price  of  imported  brown  sugar,  at  the  places 
whence  imported,  was  :  — 

In  1830 5  cents. 

In  1829 51  cents. 

In  1828 6  cents. 

Assuming  six  cents  as  the  medium  and  remunerating 
price  in  the  West  Indies,  an  ultimate  but  gradual  re- 
duction to  one  cent  and  a  half  per  pound  would  con- 
siderably lessen  the  injury  to  those  who,  relying  on  a 
continuance  of  the  duty,  have  made  investments  at  the 
elevated  artificial  prices  due  to  it ;  and  might  probably 
permit  the  owners  of  the  plantations  most  favored  by 
soil  and  climate  to  continue  the  cultivation  of  that 
product. 

The  prime  cost  of  both  salt  and  coal  is,  according  to 
the  official  statements  for  the  year  1830,  12|-  cents  a 
bushel.  The  duty  is,  therefore,  for  the  first  160%  ;  and 
for  the  last,  near  50%  on  the  value.  Both  are  neces- 
saries of  life,  and  used  in  quantities  nearly  equal,  by 
the  poor  and  by  the  rich.  Salt  is  essential  to  agricul- 
ture ;  the  duty  falls  almost  exclusively  on  the  greater 
portion  of  the  inhabitants  of  the  Atlantic  States,  and 
its  repeal  would  affect  no  other  interest,  but  that  of 
some  inconsiderable  establishments  in  a  few  places  on 
the  seashore.  The  imported  bituminous  coal  may  be 
applied  to  uses  for  which  anthracite  has  been  found 
unfit,  such  as  several  manufactures,  the  steamboat  navi- 
gation, and  iron  works  on  or  near  tidewater.  The  duty 
now  falls  exclusively  on  the  northern  seaports,  particu- 
larly New  York,  and  is  most  oppressive  on  the  most 
indigent  class  of  society.  The  only  objection  to  a  reduc- 
tion of  the  duty  to  a  rate  corresponding  with  the  value 
of  the  article  arises  from  its  effect  on  the  proprietors 


202  ALBERT  GALLATIN. 

of  the  mines  of  anthracite  coal,  and  on  the  companies 
which  have  invested  large  capitals  in  the  completion  of 
roads  and  canals  for  its  transportation.  A  duty  of  25% 
and  the  freight,  which,  if  the  importations  are  from 
Nova  Scotia,  or  in  large  quantities  from  England,  cannot 
be  less  than  ten  cents  a  bushel,  would  give  them  all  the 
protection  to  which  they  are  fairly  entitled.  We  wish 
every  possible  success  to  the  laudable  spirit  of  enter- 
prise by  which  they  have  been  animated  ;  but,  to  pre- 
vent the  reduction  of  the  price  of  fuel  to  the  poor  in  our 
large  cities,  because  extensive  beds  of  coal  have  been 
happily  discovered  at  home,  appears  to  us  a  most  strange 
and  unjust  extension  even  of  the  restrictive  system. 

The  principal  commodities  which  have  been  selected 
for  special  protection,  iron  and  all  the  coarser  woollen 
articles  of  clothing,  are,  as  well  as  salt,  coal,  and  sugar, 
essentially  necessary  to  all  classes  of  society.  The  du- 
ties laid  on  such  commodities  fall  therefore  much  more 
heavily,  in  proportion  to  their  means,  on  the  less 
wealthy  classes  ;  and  it  has  been  already  seen  with  what 
singular  ingenuity  that  on  woollens  has  been  so  arranged 
as  to  make  the  poor  pay,  in  every  instance,  considera- 
bly more  than  the  rich,  on  the  value  of  their  necessary 
clothing.  This  your  memorialists  consider  to  be,  in  its 
practical  application,  one  of  the  most  obnoxious  features 
of  the  restrictive  system.  And  it  is  principally  for  the 
same  reason  that  they  pray  that  the  duties  on  wines, 
teas,  coffee,  fruits,  spices,  silks,  and  other  articles,  not 
being  raw  materials,  which  it  is  presumed  cannot,  at 
least  at  this  time,  be  produced  in  the  United  States, 
may  be  subject  in  proportion  to  their  respective  value 
to  the  same  rate  of  duties  as  other  foreign  commodities. 

It  is  tvwlj  remarkable  that  it  should  in  the  United 
States  be  necessary  to  pray,  that  whenever  the  public 
exigencies  permit  it,  luxuries  should  be  subject  to  du- 
ties at  least  as  high  as  articles  of  general  and  equal  con- 


FREE  TRADE  MEMORIAL.  203 

sumption.  A.  temporary  departure  from  that  principle 
can  only  be  ascribed  to  that  zeal  which,  with  a  single 
eye  to  a  favorite  object,  loses  sight  of  every  other  con- 
sideration. The  annual  average  value  of  the  wines  and 
silks  consumed  in  the  United  States  amounts  to  about 
^7,000,000,  or  one  eighth  part  of  their  whole  consump- 
tion of  foreign  articles.  It  will  not  be  denied  that  both 
are,  strictly  speaking,  luxuries,  and  in  this  country  iised 
exclusively  by  the  rich.  Teas  and  coffee  are,  indeed, 
used  by  all  classes,  but  as  luxuries  by  the  poor,  and  in 
very  small  quantities  by  them,  or  out  of  the  towns,  if 
compared  with  the  consumption  by  the  wealthier  classes. 
Of  5,700,000  pounds  of  tea,  the  annual  consumption  of 
the  years  1827-1830,  less  than  80,000  pounds  consist  of 
bohea  and  less  than  one  fourth  of  the  jiart  of  the  whole 
of  bohea  and  souchong.  The  whole  annual  consumption 
is  little  more  than  half  a  pound  for  each  individual. 
Every  man  in  easy  circumstances  may  calculate  how 
much  greater  than  that  j)roportion  is  the  consumption 
of  his  family,  and  who  would  be 'relieved  by  taking 
away  the  duty  altogether.  In  this  view  of  the  subject, 
the  question  is  not  simply  whether  the  duties  on  those 
articles  shall  be  repealed  or  reduced,  but  whether  the 
reduction  shall  ap[)ly  exclusively  to  them,  whilst  those 
on  articles  of  equal  consumption  shall  be  preserved; 
instead  of  making  a  general  reduction  which  shall  render 
the  duty  uniform  on  all.  If  the  duties  on  wines,  silks, 
tea,  and  coffee  were  repealed  or  reduced  below  the  com- 
mon average,  whilst  those  of  50%  to  100%  on  iron, 
salt,  coal,  sugar,  and  coarse  clothing  were  preserved, 
every  substantial  farmer  or  mechanic  would  pay  more 
annually  than  men  who  have  an  income  of  $5,000  a 
year;  and  with  respect  to  the  poorer  classes,  the  tax 
levied  on  each  individual  would  increase  in  proportion 
to  his  want  of  means.  Your  memorialists  are  aware 
that  this  is  not  the  object  of  the  friends  of  the  restric- 


204  ALBERT  GALLATIN. 

tive  system,  but  the  unavoidable  consequence  of  the 
system  itself.  It  is  because  the  present  tariff  gives  a 
special  protection  to  some  particular  favorite  branches  of 
industry,  that  it  is  necessarily  unequal  in  its  operation, 
imposes  burdens  on  the  many  for  the  benefit  of  the  few, 
and  is  more  oppressive  upon  the  poor  than  upon  the  rich. 

It  is  well  known  to  your  honorable  body  that  the 
tariff  system  is  believed  to  be  unconstitutional  by  a 
numerous  and  respectable  portion  of  the  American  peo- 
ple, including  probably  a  majority  of  the  citizens  of  the 
southern  States.  Your  memorialists  may  not  all  unite 
in  that  opinion ;  but  they  assert  that  the  system  is  at 
variance  with  that  spirit  of  justice  and  mutual  con- 
cession in  which  the  Constitution  was  conceived  and 
adopted,  and  that  it  operates  unequally  and  unjustly 
upon  those  parts  of  the  United  States  which  supply  the 
greater  portion  of  the  national  exports,  and  are  less 
adapted  to  the  introduction  of  manufacturing  establish- 
ments. 

The  restrictive  system  lessens  the  amount  of  the  for- 
eign products  which  would  otlierwise  be  imported. 

It  has,  therefore,  an  immediate  tendency  to  lessen  the 
ever  corresponding  amount  of  exports.  The  avowed 
declaration  of  those  who  are  benefited  by  it,  and  their 
general  proscription  of  the  trade  Avith  foreign  nations, 
announce  that  such  is  their  object.  Ketaliations,  how- 
ever unwise,  may  be  provoked  by  a  hostile  course  of 
legislation.  It  cannot  be  doubted  that  a  great  diminu- 
tion of  the  exportations  will  be  the  necessary  conse- 
quence of  persevering  in  that  system,  to  the  manifest 
and  great  injury  of  those  States  which  export  most, 
and  have  no  other  resources  than  those  exports. 

The  inhabited  part  of  the  United  States  embraces 
a  territory  more  extensive  and  differing  more  in  climate 
than  the  whole  of  western  Europe.  A  necessary  and 
great  difference  must  arise  between  the  branches  of  in- 


FREE  TRADE  MEMORIAL.  205 

dustiy  to  which  the  several  portions  of  that  territory  are 
respectively  best  adapted.  This  difference  is  still  more 
increased  by  that  iu  the  nature  of  the  population.  The 
southern  States  have  always  confined  themselves  al- 
most exclusively  to  the  cultivation  of  the  rich  products 
of  their  climate.  This  is  the  only  advantage  they  enjoy, 
and  they  owe  it  to  nature.  As  they  make  but  few,  they 
consume  a  much  greater  proportion  of  manufactured 
articles  imported  from  other  States  or  other  countries. 
That  system,  therefore,  that  enhances  beyond  measure 
the  price  of  those  objects  of  necessary  consumption  oper- 
ates most  unequally  and  unjustly  upon  them.  They  are 
forbidden  to  supply  themselves  on  the  cheapest  terms 
consistent  with  the  revenue  necessary  for  the  exigencies 
of  Government.  As  the  greatest  consumers  they  must 
not  only  pay  a  greater  share  of  the  duties  requisite  to 
defray  the  necessary  national  expenditure,  but  they  are 
compelled  to  pay  the  enhanced  price  occasioned  by  the 
protecting  system.  That  system  cannot  be  extended  to 
them.  They  find  in  it  no  indemnity,  no  compensation 
for  the  injury  which  it  inflicts  upon  them.  They  have 
not,  they  cannot  in  self-defense  erect  manufacturing 
establishments.  The  nature  of  their  population  forbids 
it.  "Whether  from  color  or  situation  is  immaterial ;  the 
great  mass  of  the  working  po})ulation  of  the  southern 
States  is  inferior  in  activity,  skill,  and  intelligence  to 
that  of  the  other  sections  of  the  Union,  Where  such 
important  and  indelible  differences  do  exist,  each  part 
should  be  permitted  to  enjoy  its  natural  advantages ; 
and  that  legislation  is  unjust,  unequal,  and  oppressive 
which  attempts  to  confer  doubtful  benefits  on  the  one 
at  the  expense  of  the  other. 

It  is  idle  to  say  that  the  southern  States  find  a  com- 
pensation in  the  general  advantages  in  the  increased 
wealth  resulting  to  the  Union  from  the  protecting  sys- 
tem.    The  fallacy  of  those  pretended  advantages  has 


206  ALBERT  GALLATIN. 

been  sufficiently  exposed.  But,  admitting  their  reality, 
tliey  are,  according  to  the  doctrines  even  of  the  restric- 
tionists,  derived  from  the  losses  sustained  by  the  con- 
sumers of  the  Soutli.  The  duties  on  the  iron,  th.e 
woollen  manufactures,  the  sugar,  the  salt,  and  all  the 
other  privileged  articles  which  they  consume,  give  no 
additional  activity  or  employment  to  their  labor.  The 
amount  of  their  products  remains  the  same,  and  their 
value  may  be  lessened ;  they  pay  more  and  receive 
nothing.  In  order  that  they  might  be  placed  on  an 
ecpial  footing  with  their  fellow  -  citizens,  in  order  to 
enable  them  to  erect  manufactures,  they  stand  in  more 
need  of  a  tariff  against  those  of  the  eastern  States  than 
the  eastern  States  against  those  of  England.  From 
that  weapon  of  self-defense  they  deprived  themselves 
in  adopting  the  Constitution  of  the  United  States. 

It  cannot  be  deemed  consistent  with  justice  and  that 
spirit  of  nnitual  concession  in  which  the  Constitvition 
was  conceived  and  adopted,  to  convert  that  complete 
fi'eedom  of  internal  trade  secured  by  it  to  the  several 
States  into  a  weapon  of  oppression  upon  those  which 
from  uncontrollable  circumstances  cannot  compete  with 
others  in  particular  branches  of  industry.  Is  there  any 
substantial  difference  between  the  British  Government 
forbidding  its  American  colonies  to  trade  with  other 
nations,  and  to  purchase  any  but  British  manufactures, 
and  the  adoption  of  that  pretended  American  system 
which  compels  one  section  of  the  Union  to  resort  exclu- 
sively to  another  section  for  its  necessary  supply  of 
manufactured  articles  ? 

Your  memorialists  are  aware  that  it  may  be  urged 
that  whilst  the  exports  of  the  southern  States  have  been 
increasing  without  interruption,  those  of  the  middle 
and  northern  States,  though  fluctuating  in  value,  have 
for  forty  years  been  nearly  stationary  as  to  quantity. 
Whenever  the  demand  for  the  articles  of  food  which 


FREE  TRADE  MEMORIAL.  207 

constitute  by  far  the  greater  part  of  those  exports 
ceased  to  increase  in  the  same  ratio  as  the  population,  it 
became  not  only  useful  but  absolutely  necessary  to 
apply  to  new  objects  a  portion  of  the  industry  of  those 
States.  They  must  otherwise  have  grown  daily  poorer, 
and  been  deprived  of  the  comforts  which  they  had  till 
then  enjoyed.  The  southern  States  might  be  asked,  in 
that  spirit  of  concession  and  compromise  to  which  they 
^appeal,  not  to  oppose  a  course  of  legislation  intended 
to  encourage  the  establishment  of  manufactures,  which 
has  become  a  matter  of  necessity  in  the  parts  of  the 
Union  less  favored  by  nature  than  themselves. 

The  facts  are  admitted,  and  the  southern  States  did 
not  wait  for  that  appeal.  The  compromise  took  place, 
the  concession  was  made  from  the  time  they  consented 
that  the  whole,  or  nearly  the  whole  amount  of  the  public 
revenue  should  be  raised  by  du.ties  on  importation. 
Unable  to  compete  with  others  in  manufactures,  it  was 
clearly  their  interest  to  purchase  those  they  wanted 
wherever  they  might  be  obtained  on  the  cheapest  terms, 
and  that  a  part  at  least  of  the  revenue  should  be  de- 
rived from  other  sources.  They  voluntarily  yielded  the 
point  and  submitted  cheerfully  to  duties  amounting  on 
an  average  to  40  %  whilst  they  were  wanted  to  discharge 
the  public  debt.  That  object  could  not  have  been  ef- 
fected without  resorting  to  direct  taxation,  had  not  the 
foreign  trade  supplied  the  means.  The  taxed  imports 
which  have  paid  the  debt  have  been  purchased  with  the 
national  exports ;  and  of  these  the  oppressed  States 
have  supplied  two  thirds.  Now  that  the  object  has 
been  accomplished,  after  the  manufacturing  districts 
have,  during  forty  years,  enjoyed  the  incidental  but  not 
less  efficient  benefit  of  that  mode  of  taxation  ;  when  the 
southern  States  acquiesce  in  the  continuance  of  the 
same  system  on  a  scale  proportionate  to  the  exigencies 
of  Government,  is  it  just,  is  it  equitable,  to  aggravate 


208  V  ALBERT  GALLATIN. 

instead  of  lightening  the  burden  ?  And  can  this  addi- 
tional sacrifice  be  expected  from  them  ? 

But  no  special  protection  beyond  the  ordinary  reve- 
nue duties  has  been,  or  is,  necessary  for  the  introduction 
of  the  manufactures  reqiiired  by  the  wants  of  the  coun- 
try. The  annual  average  value  of  the  imported  mer- 
chandise paying  duties  ad  valorem  in  the  years  1798- 
1801  amounted,  after  deducting  those  exported  with  the 
benefit  of  drawback,  to  $33,747,000.  Deducting  about 
$950,000  on  account  of  articles  exported  that  were  not 
entitled  to  drawback,  and  of  the  fruits,  spices,  and  some 
other  minor  items  not  then  charged  with  specific  du- 
ties, the  residue,  amounting  to  $32,000,000,  is  the  value 
of  the  foreign  manufactured  commodities  annually  con- 
sumed at  that  time.  The  annual  average  value  of  the 
imported  goods  paying  duties  ad  valorem  during  the  years 
1821-1824,  taken  from  the  annual  statements  of  com- 
merce, amounted,  after  deducting  the  reexportations,  to 
^$32,910,000.  To  this  must  be  added,  first,  $2,700,000, 
being  the  value  of  the  iron  and  manufactured  articles 
which  now  pay  specific  duties.  Secondly,  $7,000,000, 
being  the  difference  between  the  present  value  of  the  cot- 
ton goods  now  imported  and  that  of  the  same  quantity 
in  the  years  1799-1801 ;  the  increase,  therefore,  during 
that  period  of  twenty-three  years,  amounts  to  about 
$10,600,000,  or  to  about  33%  ;  and  that  of  the  domestic 
exports  will  be  found  to  have  been  35^%.  During  the 
same  period  the  population  of  the  United  States  has 
more  than  doubled. 

It  will  not  be  denied  that  the  people  of  the  United 
States  were  at  least  as  well  supplied  in  the  year  1824 
as  in  the  year  1801  with  clothing,  furniture,  and  every 
species  of  manufactured  commodities.  A  population 
twice  as  great,  in  order  to  be  equally  well  supplied,  re- 
quired twice  the  amount  of  such  articles.  And  since 
the   value   of   foreign  goods   of  that   description   con- 


FREE  TRADE  MEMORIAL.  209 

sumed  in  the  United  States  in  1824  amounted  only  to 
$42,600,000,  instead  of  $64,000,000,  tlie  difference  must 
necessarily  have  been  supplied  by  domestic  manufac- 
tures. Not  only  those  which  were  established  in  1801 
must  have  increased  in  a  ratio  equal  to  the  increase  of 
population,  but  by  a  further  quantity,  amounting  to 
$21,400,000.  The  annual  amount  of  foreign  manufac- 
tures had,  during  that  period,  and  prior  to  the  tariffs  of 
1824  and  1828,  been  lessened  more  than  one  third  in 
proportion  to  the  population. 

The  actual  increase  of  domestic  manufactures  cannot 
be  precisely  ascertained,  since  the  actual  amount  in 
1801  is  not  known  ;  but  the  limits  of  that  increase  may 
be  correctly  estimated.  From  the  imjoerfect  data  ob- 
tained in  the  year  1810,  it  appears  certain  that  the 
amount  in  the  year  1801  did  not  exceed  $100,000,000, 
or  fall  short  of  $60,000,000.  The  domestic  manufac- 
tures formed,  therefore,  from  two  thirds  to  three  fourths 
of  the  total  amount  of  the  manufactured  commodities 
consumed.  The  total  amount  consumed  in  the  years 
1821-1824  amounted  to  $264,000,000,  according  to  the 
first  supposition,  and  to  $184,000,000,  according  to  the 
second.  Deducting,  in  both  cases,  the  amount  of  foreign 
goods  annually  consumed  in  those  years,  and  amounting 
to  $42,600,000,  the  increase  of  domestic  manufactures 
would  have  been,  in  twenty-three  years,  1211%  in  the 
first  case,  and  136%  in  the  second.  We  have  a  moral 
certainty  that  it  was  within  those  limits ;  and  that  the 
amount  of  foreign  manufactures  was  in  1824  from  one 
fifth  to  one  sixth,  while  it  was  in  1801  from  one  third 
to  one  fourth,  of  the  whole  amount  of  manufactured 
commodities  consumed. 

Proceeding  in  the  same  manner,  it  will  appear  that, 
without  any  such  special  protection  as  that  of  the  tariffs 
of  1824  and  1828,  the  total  value  of  the  manufactures 
consumed  in  the  United  States  in  the  year  1847  will 


210  ALBERT  GALLATIN. 

probably  be  $450,000,000,  of  which  the  domestic  manu- 
factures will  form  seven  eighths,  and  foreign  merchandise 
no  more  than  one  eighth  part.  In  all  probability  the 
increase  of  domestic  manufactures  will  be  greater,  in 
proportion,  during  that  period  of  twenty-three  years, 
than  during  the  next  preceding ;  since  there  will  be 
more  skill  and  experience,  a  more  dense  population,  and 
a  greater  proportionate  capital. 

The  principle  is  indisputable ;  and  if  there  is  some 
error  in  the  numbers,  it  will  no  otherwise  affect  the 
result,  than  that  it  may  take  place  a  few  years  sooner  or 
later.  But  that  result  with  a  population  so  active  and 
intelligent  is  certain.  The  question  is  only  one  of 
time  ;  and  admitting,  for  the  sake  of  argument,  that  the 
protecting  system  has  a  tendency  to  accelerate  the  estab- 
lishment of  manufactures  in  general,  all  that  can  be 
gained  by  it  is,  that  the  same  necessary  result  may  be 
obtained  a  few  years  earlier. 

A  uniform  and  moderate  duty  does  not  derange  the 
natural  order  of  things ;  and  instead  of  sustaining,  by 
artificial  means,  certain  manufactures  for  which  the 
country  may  not  be  prepared,  at  the  expense  of  the 
community,  and  particularly  of  the  poorer  classes,  to 
the  detriment  of  other  manufactures,  and  to  the  great 
injury  of  some  parts  of  the  country,  it  will  encourage 
and  successively  promote  the  various  branches  of  in- 
dustry best  adapted  to  the  state  of  society,  and  to  the 
circumstances  of  the  different  parts  of  the  Union.  A 
maximum  duty  of  25%,  added  to  the  charges  on  impor- 
tation, will  give  to  the  manufactures  that  may  require 
it  an  annual  protection  of  35%.  An  efficient  system 
that  will  prevent  frauds,  and,  as  far  as  practicable,  check 
irregular  importations  on  foreign  account,  will  insure  to 
the  manufacturer  the  legal  protection  to  its  full  extent ; 
and,  given  in  a  true  spirit  of  compromise  and  concilia- 
tion, it  will  have  that  stability  indispensable  to  hini; 


FREE  TRADE  MEMORIAL.  211 

and   on  which   he   never  can   rely,  under   the  present 
system. 

Your  memorialists  beg  leave  here  to  observe,  that, 
whilst  they  have  considered  a  duty  of  25%  as  the  high- 
est that  should,  in  any  case,  be  allowed,  they  have  not 
pretended  to  assert  that  the  average  duty  required  for 
the  exigencies  of  Government  should  be  20%  on  the 
value.  If  they  have  adopted  that  rate  in  their  cal-" 
culations,  it  has  been  only  in  order  to  meet  any  deter- 
mination that  may  be  taken  by  your  honorable  body,  on 
the  amount  of  the  revenue  which  should  be  provided 
for,  and  any  difference  of  opinion  respecting  the  prob- 
able amount  of  importations,  and  the  consequent  pro- 
ductiveness of  any  given  percentage.  In  their  own 
opinion,  the  average  duty  actually  required  would  fall 
far  short  of  20%. 

After  having  given  the  fullest  consideration  to  this 
important  subject,  your  memorialists  have  not  been 
able  to  perceive  any  other  objection  to  the  immediate 
adoption  of  the  plan  which  they  have  respectfully  sug- 
gested, than  that  which  arises  from  vested  interests. 
These  are  entitled  to  respect  only  because  they  do 
exist,  and  not  on  account  of  any  presumed  legislative 
pledge  which  no  legislature  could  give  ;  and  which,  if 
so  intended,  your  memorialists  altogether  deny  to  be 
in  any  degree  binding  upon  subsequent  legislatures. 
Your  memorialists  have,  accordingly,  been  instructed  to 
express  the  willingness  of  those  in  whose  behalf  they 
address  your  honorable  body  to  acquiesce  in  such  an 
interposition  of  the  legislative  power  as  shall  be  pro- 
spective in  its  operation,  thereby  avoiding  any  sudden 
revulsion  which  might  operate  with  undue  severity  on 
the  manufacturing  interest,  but  leading  to  the  desired 
result,  with  the  least  possible  injury  to  the  interests 
which  have  grown  up  under  the  existing  system  of 
protective  duties. 


212  ALBERT  GALLATIN. 

Your  memorialists  trust  that  the  temporary  and 
doubtful  advantages  ascribed  to  the  tariff  system,  and 
which  may,  perhaps,  accrue  to  some  particular  districts, 
will  not  be  permitted  to  outweigh  considerations  of  a 
far  more  important  character.  It  may  justly  be  ex- 
pected, from  the  patriotism  of  those  who  calculate  upon 
such  local  advantages,  that  they  will  not  insist  on  what 
is  manifestly  unjiist,  and  persevere  in  a  course  which 
disturbs  the  peace  of  the  country  and  alienates  the 
affections  of  a  numerous  portion  of  their  fellow-citizens. 

Let  it  be  recollected  that  the  system  is,  in  itself,  an 
infraction  of  an  essential  part  of  the  liberty  of  the 
citizen.  The  necessity  must  be  urgent  and  palpable, 
which  authorizes  any  government  to  interfere  in  the 
private  pursuits  of  individuals,  to  forbid  them  to  do 
that  which,  in  itself,  is  not  criminal,  and  which  every 
one  would  most  certainly  do,  if  not  forbidden.  Every 
individual,  in  every  community  without  exception,  will 
purchase  whatever  he  may  want,  on  the  cheapest  terms 
within  his  reach.  The  most  enthusiastic  restrictionist, 
the  manufacturer  most  clamorous  for  special  protection, 
will  each  individually  pursue  the  same  course,  and 
prefer  any  foreign  commodity,  or  material,  to  that  of 
domestic  origin,  if  the  first  is  cheaper,  and  the  law  does 
not  forbid  him.  All  men  ever  have  acted,  and  continue, 
under  any  system,  to  act  on  the  same  principle.  It  is 
impossible  that  they  should  universally  act  in  that 
manner,  unless  it  was  evidently  their  interest  so  to  do. 
The  tariff  system  is  founded  upon  the  principle,  that 
what  is  true  of  all  men,  individually,  is  untrue  when 
applied  to  them  collectively.  We  cannot  consider  the 
adherence  of  enlightened  nations  to  regulations  of  that 
description,  but  as  the  last  relic  of  that  system  of  gen- 
eral restrictions  and  monopolies,  which  had  its  origin 
in  barbarous  times.  If  the  corn  laws  are  the  most  odi- 
ous of  those  protecting  monopolies,  it  is  because  they 


FREE  TRADE  MEMORIAL.  213 

enhance  the  price  of  that  which  is  still  more  essentially 
necessary  than  sugar,  salt,  clothing,  or  fuel ;  and  we 
may  safely  predict  that  their  repeal  will  be  the  first 
result  of  an  imi)roved  representation  of  the  people. 

Your  memorialists  are  fully  aware  that  acquiescence 
in  the  will  of  the  majority  is  the  indispensable  con- 
dition of  a  representative  government.  The  true  problem 
to  be  solved  in  the  United  States  is  not  whether  the 
people  can  govern  themselves,  of  which  not  the  slightest 
doubt  can  be  entertained,  but  whether  that  government 
can  be  successfully  applied  to  an  extensive  territory, 
embracing  interests  which  must  occasionally  be  in  colli- 
sion with  each  other ;  whether  majorities  formed  by 
combinations  of  sectional  interests  will  be  so  governed 
by  a  sense  of  justice  and  a  spirit  of  conciliation  as  not 
to  oppress  those  parts  of  the  country,  whose  rights, 
though  they  may  be  a  minority,  ought,  nevertheless,  to 
be  respected.  The  permanence  of  the  Union  and  the 
destinies  of  this  great  and  happy  nation  have  been 
intrusted  to  your  honorable  body  ;  and,  with  an  humble 
hope  that  your  deliberations  may  be  enlightened  by  Him 
to  whom  the  United  States  are  indebted  for  all  the 
blessings  they  enjoy,  your  memorialists,  as  in  duty 
bound,  will  ever  pray,  etc. 

In  behalf  of  the  Committee, 

ALBERT  GALLATIN,  Chairman. 

New  York,    January  23,  1832. 


EEPORT    FKOM    THE    SECKETAEY  OF    THE 

TKEASUEY 

ON  THE  STATE  OF  THE   FINANCES,  ETC. 

* 

Treasury  Department,  December  3,  1845. 

In  obedience  to  the  "  Act  supplementary  to  the  act 
to  establish  the  Treasury  Department,"  the  undersigned 
respectfully  submits  the  following  report :  — 

The  receipts  and  expenditures  for  the  fiscal  year  end- 
ing the  30th  June,  1845,  were  as  follows  :  — 

RECEIPTS    AND    MEANS. 

From  customs .'S!27,528,112.70 

From  sales  of  public  lands 2,077,022.30 

From  miscellaneous  sources      ....  163,998.56 

Total  receipts $29,769,133.56 

Add  balance  in   the  treasury  1st  July, 

1844 7,857,379.64 

Total  means $37,626,513.20 

The  expenditures  during  the  same  fiscal 

year  amounted  to  the  sum  of     .     .     .      29,968,206.98 

Leaving  a  balance  in  the  treasury  on  the 

1st  July,  1845,  of $7,658,306.22 

As  appears  in  detail  by  accompanying  statement  A. 
The  estimated  receipts  and  expenditures  for  the  fiscal 
year  ending  .'!()th  June,  1846,  are  as  follows  :  — 


^ 


TREASURY  REPORT  OF  1845.  215 

RECEIPTS,  viz.  : 

From  customs,  1st  quarter,  by  actual  re- 
turns of  the  collectors $8,801,932.14 

For  2d,  3d,  and  4tli  quarters,  as  esti- 
mated      15,038,067.86 

Total  from  customs $24,500,000.00 

From  sales  of  public  lands 2,200,000.00 

From     miscellaneous     and     incidental 

sources 120,000.00 

Total  receipts $26,820,000.00 

Add  balance  in  tlie  treasury  on  the  1st 

July,  1845 7,658,306.22 

Total  means,  as  estimated ....  $34,478,306.22 

EXPENDITURES,  viz.  : 

The  actual  expenditures 
for  the  first  quarter 
ending  the  30th  Sep- 
tember, 1845,  amount- 
ed to  the  sum  of      .     .   $8,463,092.41 

As  appears  in  detail  liy 
accompanying       state- 


ment 1 


The  estimated  expendi- 
tures for  the  public 
service  during  the 
other  three  quarters, 
from  1st  October,  1845, 
to  30th  June,  1846,  are 
as  follows,  viz. :  — 

Civil  list,  foreign  inter- 
course, and  miscellane- 
ous purposes  ....      6,739,211.06 


216  ROBERT  J.   WALKER. 

Army  proper      ....   $2,594,735.06 

Fortifications,    ordnance, 

arming  militia,  etc. .     .      2,846,778.82 

Indian  department      .     .      1,649,791.94 

Tensions 1,356,556.02 

Interest   on  public   debt 

and  treasury  notes  .     .         856,976.48 

Redemption  of  the  resi- 
due of  the  loan  of  1841  29,300.00 

Treasury  notes  which  are 
yet  outstanding,  and 
payable  when  presented        687,764.18 

Naval  establishment  .     .      4,902,845.93 

1 29,627,051.90 

Which  deducted  from  the  total  of  means 
before  stated,  leaves  in  the  treasury 
on  the  1st  July,  1846,  an  estimated 
balance  of $4,851,254.32 


But  this  balance  is  subject  to  be  decreased  by  such 
additional  appropriations  as  Congress  sliall  make,  to  be 
expended  during  the  fiscal  year  ending  the  30th  June, 
1846,  and  to  be  altered  by  the  sums  which  may  be  pre- 
sented for  payment  of  the  old  funded  and  unfunded 
debt  and  old  treasury  notes. 

The  estimated  receipts,  means,  and  expenditures  for 
the  fiscal  year  commencing  1st  July,  1846,  and  ending 
30th  June,  1847,  are  as  follows,  viz. :  — 

^  The  sums  of  $1,548,907  for  supplying  deficiency  of  revenue  for 
postage,  and  also  $^300,000  for  postages  of  Congress  and  of  executive 
offices,  are  included  in  the  above  sum  of  $29,627,051.90. 


TREASURY  REPORT  OF  1845.  217 

RECEIPTS. 

From  ciistoms  for  the  four  quarters  .     .  $22,500,000.00 

From  sales  of  public  lands 2,400,000.00 

From      miscellaneous     and     incidental 

sources 100,000.00 

Total  revenue 25,000,000.00 

Add  estimated  balance  to  be  in  the  treas- 
ury on  the  1st  July,  1846 4,851,254.32 

Total  means  for  the  service  of  the  fiscal 
year  ending  the  30th  June,  1847    .     .      29,851,254.32 

EXPENDITURES. 

The  expenditures  during 
the  same  period,  as   esti- 
mated by  the  several  de- 
partments of  State,  Treas- 
ury, War,  Navy,  and  Post- 
master General,  viz. :  — 
The  balances  of  former  ap- 
propriations   which  will 
be  reqviired  to  be  expend- 
ed in  this  year .     .     .     .$1,441,457.10 
Permanent  and  indefinite 

appropriations  ....    2,997,915.72 
Specific        appropriations 

asked  for  this  year    .     .  21,079,440.43 

Total   estimated   expendi- 
ture      25,518,813.25 


218  RqUERT  J.  WALKER. 

This  sum  is  composed  of 
the  following  particu- 
lars :  — 
For  civil  list,  foreign  in- 
tercourse, and  miscel- 
laneous     ^'$5,925,292.62 

For  army  proper       .     .     .    3,364,458.92 
For      fortifications,      ord- 
nance,   arming    militia, 

etc 4,331,809.93 

For  pensions 2,507,100.00 

For  Indian  department  .  2,214,916.18 
For  naval  establishment  .  6,339,390.88 
Interest  on  public  debt      .       835,844.72 


25,518,813.25 

AVhich  deducted  from  the  total  of  means 
before  stated,  gives  an  estimated  bal- 
ance on  the  1st  of  July,  1847,  of    .     .        4,332,441.07 


The  receipts  for  tlie  first  quarter  of  this  year  are  less, 
by  $2,011,885.90,  than  the  receijjts  of  the  same  quarter 
last  year.  Among  the  causes  of  decrease  is  the  pro- 
gressive diminution  of  the  importation  of  many  highly- 
protected  articles,  and  the  substitution  of  rival  domestic 
products.  For  the  nine  months  ending  June  30,  1843, 
since  the  present  tariff,  the  average  of  duties  upon  duti- 
able imports  was  equal  to  37.84  j\j%  ;  for  the  year  end- 
ing June  30,  1844,  33.85^%%  ;  and  for  tlie  year  ending 
June  30,  1845,  29.90%  ;  showing  a  great  diminution  in 

1  The  sum  of  !f;l21,0.')0  of  debt  assumed  for  tlie  cities  in  the  Dis- 
trict of  Cohimbia,  the  sum  of  $1,OOU,()()(),  for  supplying-  deficiency  in 
the  revenues  from  postage,  and  $850,000  for  postages  for  Congress 
and  executive  departments,  are  included  in  the  foieg-oing  sum  of 
$5,02.^,292.62, 


TREASURY  REPORT  OF  1S45.  219 

the  average  percentage,  owing  in  part  to  increased  im- 
portation of  some  articles  bearing  the  lighter  duties,  and 
decreased  importation  of  others  bearing  the  higher  duty. 

The  revenue  from  ad  valorem  duties  last  year  ex- 
ceeded that  realized  from  specific  duties,  although  the 
average  of  the  ad  valorem  duties  was  only  23.57%,  and 
the  average  of  the  specific  duties  41.30'^  ;  presenting 
another  strong  proof  that  lower  duties  increase  the 
revenue.  Among  the  causes  tending  to  augment  the 
revenue  are  increased  emigration  and  the  annexation  of 
Texas.  The  estimates  for  the  expenditures  of  1846  are 
based  chiefly  upon  appro})riations  made  by  Congress. 
The  estimated  expenditures  of  1847  are  founded  upon 
data  furnished  by  the  several  departments,  and  are  less 
by  $4,108,238.65  than  those  of  the  preceding  year. 

These  estimates  are  submitted  in  the  full  conviction 
that,  whenever  Congress,  guided  by  an  eidightened 
economy,  can  diminish  the  expenditures  without  injury 
to  the  public  interest,  such  retrenchment  will  be  made, 
so  as  to  lighten  the  burden  of  taxation  and  hasten  the 
extinguishment  of  the  public  debt,  reduced  on  the  1st  of 
October  last  to  $17,075,445.52. 

In  suggesting  improvements  in  the  revenue  laws,  the 
following  principles  have  been  adopted :  — 

1st.    That  no  more  money  should  be  collected  than"is» 
necessary  for  the  wants  of  the  government,  economically 
administered. 

2d.  That  no  duty  be  imposed  on  any  article  above 
the  lowest  rate  which  will  yield  the  largest  amount  of 
revenue. 

"3d.  That  below  such  rate  discrimination  may  be  made, 
descending  in  the  scale  of  duties;  or  for  imperative 
reasons,  the  article  may  be  placed  in  the  list  of  those 
free  from  all  duty. 

4th.  That  the  maximum  revenue  duty  should  be  im- 
posed on  luxuries. 


220  ROBERT  J.  ]VALKER. 

5th.  That  all  luinimums,  and  all  specific  duties,  should 
be  abolished,  and  ad  valorem  duties  substituted  in  their 
place,  —  care  being  taken  to  guard  against  fraudulent 
invoices  and  under-valuation,  and  to  assess  the  duty 
upon  the  actual  market  value. 

Gth.  That  the  duty  should  be  so  imposed  as  to  oper- 
ate as  equally  as  possible  throughout  the  Union,  dis- 
criminating neither  for  nor  against  any  class  or  section. 

No  horizontal  scale  of  duties  is  recommended  ;  because 
such  a  scale  would  be  a  refusal  to  discriminate  for  rev- 
enue, and  might  sink  that  revenue  below  the  wants  of 
the  government.  Some  articles  will  yield  the  largest 
revenue  at  duties  that  would  be  wholly  or  partially  pro- 
hibitory in  other  cases.  Luxuries,  as  a  general  rule, 
will  bear  the  highest  revenue  duties ;  but  even  some 
very  costly  luxuries,  easily  smuggled,  will  bear  but  a 
light  duty  for  revenue ;  whilst  other  articles  of  great 
bulk  and  weight  will  bear  a  higher  duty  for  revenue. 
There  is  no  instance  within  the  knowledge  of  this  de- 
partment of  any  horizontal  tariff  ever  having  been 
enacted  by  any  one  of  the  nations  of  the  world.  There 
must  be  discrimination  for  revenue,  or  the  burden  of 
taxation  must  be  augmented,  in  order  to  bring  the  same 
amount  of  money  into  the  treasury.  It  is  difficult,  also, 
to  adopt  any  arbitrary  maximum  to  which  an  inflexible 
adherence  must  be  demanded  in  all  cases.  Thus  upon 
In-andy  and  spirits,  a  specific  duty,  varying  as  an  equiv- 
alent ad  valorem  from  180%  to  261%,  yields  a  large 
revenue  ;  yet  no  one  Avould  propose  either  of  these  rates 
as  a  maximum.  These  duties  are  too  high  for  revenue, 
from  the  encouragement  they  present  for  smuggling 
these  baneful  luxuries  ;  yet  a  duty  of  20%  upon  brandy 
and  spirits  would  be  far  below  the  revenue  standard, 
would  greatly  diminish  the  income  on  these  imports, 
require  increased  burdens  upon  the  necessaries  of  life, 
and  would  revolt  the  moral  sense  of  the  whole  com- 


TREASURY  REPORT  OF  1845.  221 

munity.      There   are   many  other  luxuries  which  will 
bear  a  much  higher  duty  for  revenue  than  20%  ;  and 
the  only  true  maximum  is  that  which  experience  dem- 
onstrates will  bring,  in  each  case,  the  largest  revenue 
at  the  lowest  rate  of  duty.     ISTor  should  maximum  rev- 
enue duties  be  imposed  upon  all  articles  ;  for  this  would 
yield  too  large  an  income,  and  would  prevent  all  discrim- 
ination within  the  revenue  standard,  and  require  neces- 
saries to  be  taxed  as  high  as  luxuries.     But,  whilst  it  is 
impossible  to  adopt  any  horizontal  scale  of  duties,  or 
even  any  arbitrary  maximum,  experience  proves   that, 
as  a  general  rule,  a  duty  of  20%  ad  valorem  will  yield 
the  largest  revenue.     There  are,  however,  a  few  excep- 
tions above,  as  well  as  many  below  this  standard.    Thus, 
whilst  the  lowest  revenue  duty  on  most  luxuries  exceeds 
20%,  there   are   many   costly   articles   of   small   bulk, 
easily  smuggled,  which  would  bring,  perhaps,  no  revenue 
at  a  duty  as  high  as  20%  ;  and  even  at  the  present  rate 
of  7^%,  they  yield,  in  most  cases,  a  small  revenue; 
whilst  coal,  iron,  sugar,  and  molasses,  articles  of  great 
bulk  and  weight,  yielded  last  year  six  millions  of  rev- 
enue, at  an   average   rate  of  duty  exceeding  60%  ad 
valorem.      These  duties  are  far  too  high  for  revenue 
upon  all  these  articles,  and  ought  to  be  reduced  to  the 
revenue  standard ;  but  if  Congress  desire  to  obtain  the 
largest   revenue   from   duties    on   these   articles,  those 
duties,  at  the  lowest  rate  for  revenue,  would  exceed  20% 
ad  valorem. 

There  are  appended  to  this  report  tables,  prepared  with 
great  care  and  labor,  showing  the  rates  of  duty  each  year 
on  each  of  these  four  articles,  and  the  equivalent  ad  va- 
lorem from  the  organization  of  the  government  down  to 
the  present  period,  with  the  revenue  collected  every  year 
upon  each ;  from  which  tables  Congress  will  be  enabled 
to  judge  how  far  the  present  rates  exceed  the  lowest 
revenue  duties,  and  how  much  they  must  be  reduced  so 


222  ROBERT  J.  WALKER. 

as  to  yield  a  revenue  equal  to  that  now  obtained  from 
these  articles. 

It  is  believed  that  sufficient  means  can  be  obtained, 
at  the  lowest  revenue  duties  on  the  articles  now  sub- 
jected to  duty ;  but  if  Congress  desire  a  larger  revenue, 
it  should  be  procured  by  taxing  the  free  articles,  rather 
than  transcend,  in  any  case,  the  lowest  revenue  duties. 
It  is  thought,  however,  that,  without  exceeding  that 
limit  in  any  case,  an  adequate  revenue  will  still  be  pro- 
duced, and  permit  the  addition  to  the  free  list  of  salt 
and  guano.  In  one  of  his  annual  messages,  Mr.  Jeffer- 
son recommended  to  Congress  "  the  suppression  of  the 
duties  on  salt."  A  large  portion  of  this  duty  is  ex- 
hausted in  heavy  expenses  of  measuring  salt,  and  in 
large  sums  paid  for  fishing  bounties  and  allowances  in 
lieu  of  the  drawback  of  the  duty,  both  which  expendi- 
tures would  fall  with  a  repeal  of  the  duty  ;  which  repeal, 
therefore,  can  cause  no  considerable  reduction  of  the 
revenue.  Salt  is  a  necessary  of  life,  and  should  be  as 
free  from  tax  as  air  or  water.  It  is  used  in  large  quan- 
tities by  the  farmer  and  planter ;  and  to  the  poor,  this 
tax  operates  most  oppressively,  not  only  in  the  use  of 
the  article  itself,  but  as  combined  with  salted  provisions. 
The  salt  made  abroad  by  solar  evaporation  is  also  most 
pure  and  wholesome,  and,  as  conservative  of  health, 
should  be  exempt  from  taxation. 

The  duty  on  cotton-bagging  is  equivalent  to  55.20% 
ad  valorem  on  the  Scotch  bagging,  and  to  123.11%  on  the 
gunny-bag ;  and  yet  the  whole  revenue  from  these  duties 
has  fallen  to  $60,0^4-50.  Nearly  the  entire  amount, 
therefore,  of  this  enormous  tax  makes  no  addition  to 
the  revenue,  but  inures  to  the  benefit  of  about  thirty 
manufacturers.  As  five  sixths  of  the  cotton  crop  is 
exported  abroad,  the  same  proportion  of  the  bagging 
around  the  bale  is  exported,  and  sold  abroad  at  a  heavy 
loss,  growing  out  of  a  deduction  for  tare.    Now,  as  duties 


TREASURY  REPORT  OF  1S45.  223 

are  designed  to  operate  only  on  the  domestic  consump- 
tion, there  ought  to  be  a  drawback  of  the  whole  duty 
on  cotton-bagging  reexported  around  the  bale,  on  the 
same  principles  on  which  drawbacks  are  allowed  in 
other  cases.  The  cotton  planting  is  the  great  exporting 
interest,  and  suffers  from  the  tariff  in  the  double  ca- 
pacity of  consumer  and  exporter.  Cotton  is  the  great 
basis  of  our  foreign  exchange,  furnishing  most  of  the 
means  to  purchase  im})orts  and  supply  the  revenue.  It 
is  thus  the  source  of  two  thirds  of  the  revenue,  and  of 
our  foreign  freight  and  commerce ;  u})holding  our  com- 
mercial marine  and  maritime  power.  It  is  also  a  bond 
of  peace  with  foreign  nations,  constituting  a  stronger 
preventive  of  war  than  armies  or  navies,  forts  or  arma- 
ments. At  present  prices,  our  cotton  crop  will  yield  an 
annual  product  of  .$72,000,000,  and  the  manufactured 
fabric  $504,000,000,  furnishing  profits  abroad  to  thou- 
sands of  capitalists,  and  wages  to  hundreds  of  thousands 
of  the  working  classes ;  all  of  whom  would  be  deeply 
injured  by  any  disturbance,  grooving  out  of  a  state  of 
war,  to  the  direct  and  adequate  supply  of  the  raw  ma^ 
terial.  If  our  manufacturers  consume  400,000  bales,  it 
would  cost  them  $12,000,000  whilst  selling  the  manu- 
factured fabric  for  $84,000,000  ;  and  they  should  be  the 
last  to  unite  in  imposing  heavy  taxes  upon  that  great 
interest  which  supplies  them  with  the  raw  material  out 
of  which  they  realize  such  large  profits.  Accompanying 
the  drawback  of  the  duty  on  cotton-bagging  should  be 
the  repeal  of  the  duty  on  foreign  cotton,  which  is  in- 
operative and  delusive,  and  not  desired  by  the  domestic 
producer. 

The  condition  of  our  foreign  relations,  it  is  said, 
should  suspend  the  reduction  of  the  tariff.  No  Amer- 
ican patriot  can  desire  to  arrest  our  onward  career  in 
peace  and  prosperity  ;  but  if,  unhappily,  such  should  be 
the  result,  it  would  create  an  increased  necessity  for 


224  ROBERT  J.  WALKER. 

reducing  our  present  high  duties  in  order  to  obtain 
sufficient  revenue  to  meet  increased  expenditures.  The 
duties  for  the  quarter  ending  tlie  30th  September,  1844, 
yielded  .1i!2,011, 885.90  more  of  revenue  than  the  quarter 
ending  oOth  September,  1845 ;  showing  a  very  consider- 
able decline  of  the  revenue,  growing  out  of  a  diminished 
importation  of  the  highly-protected  articles  and  the  pro- 
gressive substitution  of  the  domestic  rivals.  Indeed, 
many  of  the  duties  are  becoming  dead  letters,  except  for 
the  purpose  of  prohibition,  and,  if  not  reduced,  will 
ultimately  compel  tlieir  advocates  to  resort  to  direct 
taxation  to  support  the  government.  In  the  event  of 
war,  nearly  all  the  high  duties  would  become  prohibitory, 
from  the  increased  risk  and  cost  of  importations  ;  and 
if  there  be,  indeed,  in  the  opinion  of  any,  a  serious 
danger  of  such  an  occurrence,  it  appeals  most  strongly 
to  their  patriotism  to  impose  the  lowest  revenue  duties 
on  all  articles,  as  the  only  means  of  securing,  at  such  a 
period,  any  considerable  income  from  the  tariff. 

The  whole  power  to  collect  taxes,  whether  direct  or 
indirect,  is  conferred  by  the  same  clause  of  the  Constitu- 
tion. The  words  are,  "  The  Congress  shall  have  power 
to  lay  and  collect  taxes,  duties,  imposts,  and  excises." 
A  direct  tax  or  excise,  not  for  revenue,  but  for  pro- 
tection, clearly  would  not  be  within  the  legitimate  ob- 
ject of  taxation ;  and  yet  it  would  be  as  much  so  as 
a  duty  imposed  for  a  similar  purpose.  The  power  is 
"  to  lay  and  collect  taxes,  duties,  imposts,  and  excises." 
A  duty  must  be  laid  only  that  it  may  be  collected; 
and  if  it  is  so  imposed  that  it  cannot  be  collected,  in 
whole  or  in  part,  it  violates  the  declared  object  of  the 
granted  power.  To  lay  all  duties  so  high  that  none  of 
them  could  be  collected  would  be  a  prohibitory  tariff. 
To  lay  a  duty  on  any  one  article  so  high  that  it  could 
not  be  collected  would  be  a  prohibitory  tariff  upon  that 
article.     If  a  duty  of  100^  were  imposed  upon  all  or 


TREASURY  REPORT  OF  1845.  225 

upon  a  number  of  articles,  so  as  to  diminish  the  rev- 
enue upon  all  or  any  of  them,  it  would  operate  as  a 
partial  prohibition.  A  partial  and  a  total  prohibition 
are  alike  in  violation  of  the  true  object  of  the  taxing 
power.  They  only  differ  in  degree,  and  not  in  principle. 
If  the  revenue  limit  may  be  exceeded  1%,  it  may  be 
exceeded  100%.  If  it  may  be  exceeded  upon  any  one 
article,  it  may  be  exceeded  on  all;  and  there  is  no 
escape  from  this  conclusion,  but  in  contending  that 
Congress  may  lay  duties  on  all  articles  so  high  as  to 
collect  no  revenue,  and  operate  as  a  total  prohibition. 

The  Constitution  declares  that  "  All  bills  for  raising 
revenue  shall  originate  in  the  House  of  Eepresenta- 
tives."  A  tariff  bill,  it  is  conceded,  can  only  originate 
in  the  House,  because  it  is  a  bill  for  raising  revenue. 
That  is  the  only  proper  object  of  such  a  bill.  A  tariff 
is  a  bill  to  "  lay  and  collect  taxes."  It  is  a  bill  for 
"  raising  revenue,"  and  whenever  it  departs  from  that 
object,  in  whole  or  in  part,  either  by  total  or  partial 
prohibition,  it  violates  the  purpose  of  the  granted 
power. 

In  arranging  the  details  of  the  tariff,  it  is  believed 
that  the  maximum  revenue  duties  should  be  imposed 
upon  luxuries.  It  is  deemed  just  that  taxation,  whether 
direct  or  indirect,  should  be  as  nearly  as  practicable  in 
proportion  to  property.  If  the  whole  revenue  were 
raised  by  a  tax  upon  property,  the  poor,  and  especially 
those  who  live  by  the  wages  of  labor,  would  pay  but  a 
very  small  portion  of  such  tax  ;  whereas,  by  the  tariff, 
the  poor,  by  the  consumption  of  various  imports  or 
domestic  articles  enhanced  in  price  by  the  duties,  pa}'- 
a  much  larger  share  of  the  taxes  than  if  they  were  col- 
lected by  an  assessment  in  proportion  to  property.  To 
counteract  as  far  as  possible  this  effect  of  the  tariff,  — 
to  equalize  its  operation,  and  make  it  approximate  as 
nearly  as  may  be  to  a  system  of  taxes  in  proportion  to 


226  ROBERT  J.  WALKER. 

])r()perty,  — tlic  duties  upon  luxuries,  used  almost  exclu- 
sively by  the  rich,  should  be  fixed  at  the  highest  reve- 
nue standard.  This  would  not  be  discriminating  in 
favor  of  the  poor,  however  just  that  might  be  within 
the  revenue  limit ;  but  it  would  mitigate,  as  far  as  prac- 
ticable, that  discrimination  against  the  poor  which  re- 
sults from  every  taritf,  by  compelling  them  to  pay  a 
larger  amount  of  taxes  than  if  assessed  and  collected 
on  all  property  in  proportion  to  its  value.  In  accord- 
ance with  these  principles  it  is  believed  that  the  largest 
practicable  portion  of  the  aggregate  revenue  should 
be  raised  by  maximum  revenue  duties  upon  luxuries, 
whether  grown,  produced,  or  manufactured  at  home  or 
abroad. 

An  appeal  has  been  made  to  the  poor,  by  the  friends 
of  })rote('tion,  on  the  ground  that  it  augments  the 
wages  of  labor.  In  reply,  it  is  contended  that  the  wages 
of  labor  have  not  augmented  since  the  tariff  of  1842, 
and  that  in  some  cases  they  have  diminished. 

When  the  number  of  manufactories  is  not  great,  the 
power  of  tlie  system  to  regulate  the  wages  of  labor  is 
inconsiderable  ;  but  as  the  profit  of  capital  invested  in 
manufactures  is  augmented  by  the  protective  tariff, 
there  is  a  corresponding  increase  of  power,  until  the 
control  of  such  capital  over  the  wages  of  labor  becomes 
irresistible.  As  this  power  is  exercised  from  time  to 
time,  we  find  it  resisted  by  combinations  among  the 
working  classes,  by  turning  out  for  higher  wages,  or  for 
shorter  time  ;  by  trades-union ;  and  in  some  countries, 
unfortunately,  by  violence  and  bloodshed.  But  tlie 
government,  by  protective  duties,  arrays  itself  on  the 
side  of  the  manufacturing  system,  and  by  thus  augment- 
ing its  wealth  and  power,  soon  terminates  in  its  favor 
the  struggle  between  man  and  money,  —  between  capi- 
tal and  labor.  When  the  tariff  of  1842  was  enacted, 
the  maximum  duty  was  20%.     By  that  act,  the  average 


TREASURY  REPORT  OF  1845.  227 

of  duties  on  the  protected  articles  was  more  than  double. 
But  the  wages  of  labor  did  not  increase  in  a  correspond- 
ing ratio,  or  in  any  ratio  whatever.  On  the  contrary, 
whilst  wages  in  some  cases  have  diminished,  the  prices 
of  many  articles  used  by  the  working  classes  have 
greatly  appreciated. 

A  protective  tariff  is  a  question  regarding  the  en- 
hancement of  the  profits  of  capital.  That  is  the  object, 
and  not  to  augment  the  wages  of  labor,  which  would  re- 
duce those  profits.  It  is  a  question  of  percentage,  and 
is  to  decide  whether  money  vested  in  our  manufactures 
sliall,  by  special  legislation,  yield  a  i)r()fit  of  10,  20,  or 
30%,  or  whether  it  shall  remain  satisfied  with  a  divi- 
dend equal  to  that  accruing  from  the  same  capital  in- 
vested in  agriculture,  commerce,  or  navigation. 

The  present  tariff  is  unjust  and  unequal,  as  well  in 
its  details  as  in  the  principles  upon  which  it  is  founded. 
On  some  articles  the  duties  are  entirely  prohibitory, 
and  on  others  there  is  a  partial  prohibition.  It  dis- 
criminates in  favor  of  manufactures  and  a<?ainst  a^vi- 
culture,  by  imposing  many  higher  duties  upon  the 
manufactured  fabric  than  upon  the  agricultural  product 
out  of  which  it  is  made.  It  discriminates  in  favor  of 
the  manufacturer  and  against  the  mechanic,  by  many 
higher  duties  upon  the  manufacture  than  upon  the  arti- 
cle made  out  of  it  by  the  mechanic.  It  discriminates 
in  favor  of  the  manufacturer  and  against  the  merchant, 
by  injurious  restrictions  upon  trade  and  commerce  ;  and 
against  the  ship-building  and  navigating  interest,  by 
heavy  duties  on  almost  every  article  used  in  building 
or  navigating  vessels.  It  discriminates  in  favor  of 
manufactures  and  against  exports,  which  are  as  truly 
the  product  of  American  industry  as  manufactures.  It 
discriminates  in  favor  of  the  rich  and  against  the  poor, 
by  high  duties  upon  nearly  all  the  necessaries  of  life 
and  by  miiiimums  and  specific  duties,  rendering  the  tax 


228  ROBERT  J.  WALKER. 

upon  the  veul  value  iiuKih  higher  on  the  cheaper  than 
upon  the  finer  article. 

Mininiums  are  a  fictitious  value  assumed  by  law,  in- 
stead of  the  real  value  ;  and  the  operation  of  all  mini- 
nnims  may  be  illustrated  by  a  single  example.  Thus, 
by  the  tariff  of  1842,  a  duty  of  30%  ad  valorem  is  levied 
on  all  manufactures  of  cotton ;  but  the  law  further 
provides  that  cotton  goods  "  not  dyed,  colored,  printed, 
or  stained,  not  exceeding  in  value  twenty  cents  per 
square  yard,  shall  be  valued  at  twenty  cents  per  square 
yard."  If,  then,  the  real  value  of  the  cheapest  cotton 
goods  is  but  four  cents  a  square  j^ard,  it  is  placed  by  the 
law  at  the  false  value  of  twenty  cents  per  square  yard, 
and  the  duty  levied  on  the  fictitious  value,  —  raising  it 
five  times  higher  on  the  cheap  article  consumed  by  the 
poor,  than  upon  the  fine  article  purchased  by  the  more 
wealthy.  Indeed,  by  House  document  No.  306,  of  the 
1st  session  of  the  28th  Congress,  this  difference,  by  ac- 
tual importation,  was  65%  between  the  cheaper  and  the 
finer  article  of  the  20%  minimum,  131%  on  the  30% 
minimum,  48i%  on  the  35%  minimum,  84%  on  the 
60%  minimum,  and  84%  on  the  75%  minimum.  This 
difference  is  founded  on  actual  importation,  and  shows 
an  average  discrimination  against  the  poor  on  cotton 
imports  of  82%  beyond  what  the  tax  would  be  if 
assessed  upon  the  actual  value.  The  operation  of  the 
specific  duty  presents  a  similar  discrimination  against 
the  poor  and  in  favor  of  the  rich.  Thus,  upon  salt :  the 
duty  is  not  upon  the  value,  but  it  is  eight  cents  a  bushel, 
whether  the  article  be  coarse  or  fine,  —  showing  by  the 
same  document,  from  actual  im})ortation,  a  discrimina- 
tion of  64%  against  the  cheap  and  in  favor  of  the  finer 
article;  and  this,  to  a  greater  or  less  extent,  is  the 
effect  of  all  specific  duties.  When  we  consider  that 
$2,892,621.74  of  the  revenue  last  year  was  collected  by 
minimum  duties,  and  $13,311,085.46  by  specific  duties. 


TREASURY  REPORT  OF  1845.  229 

the   discrijnmatiou   against  the   cheaper    article   must 
amount,  by  estimates  founded  on  the  same  document, 
to  a  tax  of  $5,108,422  exacted  by  minimums  and  specific 
duties  annually  from  the  poorer  classes,  by  raising  thus 
the  duties  on  the   cheaper   articles   above  what   they 
would  be  if  the   duty  were  assessed  upon  the  actual 
value.     If  direct  taxes  were  made  specific,  they  would 
be  intolerable.     Thus,  if  an  annual  tax  of  |>30  were  as- 
sessed on  all   houses  without    respect  to  their  actual 
value,  making  the  owner  of  the  humble  tenement  or 
cabin  pay  a  tax  of  $30  and  the  owner  of  the   costly 
mansion  a  tax  of  but  $30  on  their  respective  houses,  it 
would  differ  only  in  degree,  but  not  in  principle,  from  the 
same  unvarying  specific  duty  on  cheap  as  on  tine  articles. 
If  any  discrimination  should  be  made,  it  should  be  the  re- 
verse of  the  specific  duty,  and  of  the  minimum  princi- 
ple, by  establishing  a  maximum  standard  above  which 
value  the  duties  on  the  finer  article  should  be  higher, 
and  below  which  they  should  be  lower  on  the  cheaper 
article.      The  tax  upon   the  actual  value  is  the  most 
equal,  and  can  only  be  accomplished  by  ad  valorem  du- 
ties.    As  to  fraudulent  invoices  and  under-valuations, 
these  dangers  are  believed  to  be  arrested  effectually  by 
the  stringent  provisions  and  severe  penalty  of  the  ITtli 
section  of  the  tariff  of  1842 ;  and  now  one  half  the  rev- 
enue is  collected  from  ad  valorem  duties. 

At  least  two  thirds  of  the  taxes  imposed  by  the  present 
tariff  are  paid,  not  into  the  treasury  but  to  the  protected 
classes.  The  revenue  from  imports  last  year  exceeded 
$27,000,000.  This  in  itself  is  a  heavy  tax ;  but  the 
wliole  tax  imposed  upon  the  people  by  the  present  tariff 
is  not  less  than  $81,000,000,  —  of  Avhich  $27,000,000 
are  paid  to  the  government  upon  the  imports,  and 
$54,000,000  to  the  protected  classes,  in  enhanced  prices 
of  similar  domestic  articles. 

This  estimate  is  based  upon  the  position  that  the  duty 


230  liOBEIiT  J.   WxiLKEE. 

is  added  to  the  price  of  the  import,  and  also  of  its  do- 
mestic rival.  If  the  import  is  enhanced  in  price  by  the 
duty,  so  nmst  be  the  domestic  rival ;  for,  being  like 
articles,  their  price  must  be  the  same  in  the  same  mar- 
ket. The  merchant  advances  in  cash  the  duty  on  the 
import,  and  adds  the  duty,  with  a  profit  upon  it,  and 
other  charges,  to  the  price,  —  which  mu.st  therefore  be 
enhanced  to  that  extent ;  unless  the  foreign  producer  had 
first  deducted  the  duty  from  the  price.  But  this  is  im- 
possible ;  for  such  now  is,  and  long  has  been,  the  super- 
abundance of  capital  and  active  competition  in  Europe, 
that  a  profit  of  G'^  in  any  business  is  sufficient  to  pro- 
duce large  investments  of  money  in  that  business  ;  and 
if,  by  our  tariff,  a  duty  of  40%  be  exacted  on  the  pro- 
ducts of  such  business,  and  the  foreign  producer  de- 
ducts that  duty  from  his  previous  price,  he  must  sustain 
a  heavy  loss.  This  loss  would  also  soon  extend  beyond 
the  sales  for  our  consumption  to  sales  to  our  merchants 
of  articles  to  be  reexported  by  them  from  our  ports 
with  a  drawback  of  the  duty,  which  would  bring  down 
their  price  throughout  the  markets  of  the  world.  But 
this  the  foreign  producer  cannot  afford.  The  duty, 
therefore,  must  be  added  to  the  price,  and  paid  by  the 
consumer,  —  the  duty  constituting  as  much  a  part  of 
the  price  as  the  cost  of  production. 

If  it  be  true  that,  when  a  duty  of  40%  is  imposed  by 
uiir  tariff,  the  foreign  producer  first  deducts  the  duty 
from  the  previous  price  on  the  sale  to  our  merchant,  it 
must  be  equally  true  with  a  duty  of  100%,  which  is  ex- 
actly equal  to  the  previous  price,  and,  when  deducted, 
would  reduce  the  price  to  nothing. 

The  occasional  fall  in  price  of  some  articles  after  a 
tariff  is  no  proof  that  this  was  the  effect  of  the  tariff ; 
because,  from  improved  machinery,  diminished  prices 
of  the  raw  material,  or  other  causes,  prices  may  fall 
even  after  a  tariff,  but  they  would  in  such  cases  have 


TREASURY  REPORT  OF  1845.  231 

fallen  much  more  but  for  tlie  tariff.  The  truest  com- 
parison is  between  the  present  price  of  the  same  article 
at  home  and  abroad ;  and  to  the  extent  that  the  price  is 
lower  in  the  foreign  market  than  in  our  own,  the  duty, 
if  equal  to  that  difference,  must  to  that  extent  enhance 
the  price,  and  in  the  same  ratio  with  the  lower  duty. 
The  difference  in  price  at  home  or  abroad  is  generally 
about  equal  to  the  difference  in  the  cost  of  production, 
and  presents  in  a  series  of  years  the  surest  measure  of 
the  effect  of  the  duty, — the  enhancement  in  price  being 
equal  to  that  difference  if  the  duty  be  higher  than  that 
difference  or  equal  to  it ;  or  if  the  duty  be  lower,  then 
the  enhancement  is  equal  to  the  duty  ;  and  if  the  arti- 
cle is  produced,  like  cotton,  more  cheaply  here  than 
abroad  the  duty  is  inoperative.  The  great  argument 
for  the  tariff  is  that,  foreign  labor  being  cheaper  than 
our  own,  the  cost  of  foreign  productions,  it  is  said,  is 
lessened  to  tliat  extent ;  and  that  we  must  make  up 
this  difference  by  an  equivalent  duty,  and  a  correspond- 
ing enhancement  of  i»riee  in  our  own  market  both  of  the 
foreign  article  and  of  its  rival  domestic  product,  —  thus 
rendering  the  duty  a  tax  on  all  consumers,  for  the  ben- 
fit  of  the  protected  classes.  If  the  marshal  were  sent 
by  the  federal  government  to  collect  a  direct  tax  from 
the  whole  people,  to  be  paid  over  to  manufacturing  caj)- 
italists  to  enable  them  to  sustain  their  business,  or  real- 
ize a  larger  profit,  it  would  be  the  same  in  effect  as  the 
protective  duty,  which,  when  analyzed  in  its  simplest 
elements,  and  reduced  to  actual  results,  is  a  mere  sul> 
traction  of  so  much  money  from  the  people,  to  increase 
the  resources  of  the  protected  classes.  Legislation  for 
classes  is  against  the  doctrine  of  equal  rights,  repug- 
nant to  the  spirit  of  oiir  free  institutions,  and,  it  is  ap- 
prehended by  many,  may  become  but  another  form  for 
privileged  orders  under  the  name  of  protection  instead 
of  privilege  —  indicated  here  not  by  rank  or  title,  but 


232  ROBERT  J.   WALKER. 

« 

by  profits  and  dividends  extracted  from  the  many  by 
taxes  upon  them  for  the  benefit  of  the  few. 

No  prejudice  is  felt  by  the  Secretary  of  the  Treasury 
against  manufacturers.  His  opposition  is  to  the  pro- 
tective system,  and  not  to  classes  or  individuals.  He 
doubts  not  that  the  manufacturers  are  sincerely  per- 
suaded that  the  system  which  is  a  source  of  so  much 
profit  to  them  is  beneficial  also  to  the  country.  He  en- 
tertains a  contrary  opinion,  and  claims  for  the  oppo- 
nents of  tlie  system  a  settled  conviction  of  its  injurious 
effects.  Whilst  a  due  regard  to  the  just  and  equal 
rights  of  all  classes  forbids  a  discrimination  in  favor  of 
the  manufacturers  by  duties  above  the  lowest  revenue 
limit,  no  disposition  is  felt  to  discriminate  against  them 
1  y  reducing  such  duties  as  operate  in  their  favor  below 
that  standard.  Under  revenue  duties,  it  is  believed, 
they  would  still  receive  a  reasonable  profit  —  equal  to 
that  realized  by  those  engaged  in  other  pursuits  ;  and  it 
is  thought  they  should  desire  no  more,  at  least  through 
the  agency  of  governmental  power.  Ecpial  rights  and 
profits,  so  far  as  laws  are  made,  best  conform  to  the 
principles  upon  which  the  Constitution  was  founded, 
and  with  an  undeviating  regard  to  which  all  its  func- 
tions shoidd  be  exercised,  —  looking  to  the  whole  coun- 
try and  not  to  classes  or  sections. 

Soil,  climate,  and  other  causes  vary  very  much,  in 
different  countries,  the  pursuits  which  are  most  profita- 
ble in  each  ;  and  the  prosperity  of  all  of  them  will  be 
best  promoted  by  leaving  them  unrestricted  by  legisla- 
tion, to  exchange  with  each  other  those  fabrics  and  pro- 
ducts Avhich  they  severally  raise  most  cheaply.  This  is 
clearly  illustrated  by  the  perfect  free  trade  which  exists 
among  all  the  States  of  the  Union,  and  by  the  acknow- 
ledged fact  that  any  one  of  these  States  would  be  in- 
jured by  imposing  duties  upon  the  products  of  the 
others.     It  is  generally  conceded  that  reciprocal   free 


TBEASUBY  REPORT  OF  1845.  233 

trade  among  nations  would  best  advance  the  interest  of 
all.     But  it  is  contended  that  we  must  meet  the  tariffs 
of  other  nations  by  countervailing  restrictions.     That 
duties  upon  our  exports  by  foreign  nations  are  prejudi- 
cial to  us,  is  conceded ;  but  whilst  this  injury  is  slightly 
felt  by  the  manufacturers,  its  weight  falls  almost  ex- 
clusively upon  agriculture,  commerce,  and  navigation. 
If  those  interests  which  sustain  the  loss  do  not  ask 
countervailing  restrictions,  it  should  not  be  demanded 
by  the  manufacturers,  who  do  not  feel  the  injury,  and 
whose  fabrics,  in  fact,  are  not  excluded  by  the  foreign 
legislation  of  wliich  tliey  complain.     That  agriculture, 
commerce,  and  navigation    are   injured   by  foreign  re- 
strictions, constitutes  no  reason  why  they  should   be 
subject  to  still  severer  treatment  by  additional  restric- 
tions and  countervailing  tariffs  enacted  at  home.     Com- 
merce,   agriculture,   and   navigation,   harassed  as   they 
may  be  by  foreign  restrictions,  diminishing  the  amount 
of  exchangeable  products  which  they  could  otherwise 
purchase  abroad,  are  burdened  with  heavier  impositions 
at  home.     Kor  will  augmented  duties  here  lead  to  a  re- 
duction of  foreign  tariff's  ;  but  the  reverse,  by  furnishing 
the  protected  classes  there  with  the  identical  argument 
used  by  the  protected  classes  here  against  reduction. 
By  countervailing  restrictions  we  injure  our  own  fellow 
citizens  much  more  than  the  foreign  nations  at  whom 
we  propose  to  aim  their  force ;  and  in  the  conflict  of 
opposing  tariffs,   we  sacrifice  our  own  commerce,  agri- 
culture, and  navigation.     As  well  might  we  impose  mo- 
narchical or  aristocratic  restrictions  on  our  own  govern- 
ment or  people  because  that  is  the  course  of  foreign 
legislation.     Let  our  commerce  be  as  free  as  our  polit- 
ical  institutions.     Let   us,   with   revenue    duties  only, 
open  our  ports  to  all  the  world,  and  nation  after  nation 
will  soon  follow  our  example.     If  we  reduce  our  tariff, 
the  party  opposed  to  tlie  corn  laws  of  England   wouhl 


234  BOliERT  J.  WALKER. 

soon  prevail,  and  admit  all  our  agricultural  products  at 
all  times  freely  into  her  ports,  in  exchange  for  her  ex- 
ports.   And  if  England  would  now  repeal  her  duties  upon 
our  wheat,  flour,  Indian   corn,    and  other  agricultural 
products,   our   own  restrictive  system  would   certainly 
be  doomed  to  overthrow.     If  the  question  is  asked,  who 
shall  begin  this  work  of  reciprocal  reduction  ?  it  is  an- 
swered by  the  fact,  that  England  has  already  abated 
her  duties  upon  most  of  our  exports.     She  has  repealed 
the  duty  upon   cotton,  and  greatly  reduced  the  tariff 
upon  our  breadstuffs,  provi_sions,  and  other  articles  ;  and 
her  present  bad  harvest,  if  accompanied  by  a  reduction 
of  our  tariff,  would  lead  to  the  repeal  of  her  corn  laws, 
and  the  unrestricted  admission,  at  all  times,  of  our  agri- 
cultural products.     The  manufacturing  interest  opposes 
reciprocal    free    trade   with    foreign   nations.      It   op- 
poses the  Zoll-Verein  treaty  ;  and  it  is  feared  that  no 
other   treaty  producing   a   reciprocal   reduction  of  our 
own  and  foreign  tariffs  will  receive  its  support.    If  that 
interest  preferred  a  reciprocal  exchange  of  our  own  for 
foreign  fabrics,  at  revenue  duties,  it  would  not  have  de- 
sired a  tariff  operating,  without  exception,  against  all 
nations  that   adopted  low  as  well  as  high  tariffs ;  nor 
would    it   have   op})Osed  every  amendment   proposing, 
when  the  tariff  of  1842  was  under  consideration,  a  re- 
duction of  our  duties  \ipon  the  exports  of  such  nations 
as  would  receive,  free  of  duty,  our  flour  and  other  agri- 
cultural  products.     If  that  interest  desired  reciprocal 
free  trade  with  other  nations,  it  would  have  desired  a 
very  different  tariff  from  that  of  1842.     It  would  have 
sought  to  confine  the  high  duties  to  those  cases  where 
the  foreign  importer  would  sell  his  imports  for  cash 
only ;  and  admitted  a  drawback  of  one  half  of  the  duty 
where  American  exports  would  be  taken  abroad  in  ex- 
change, —  not  an  actual  barter  of  foreign  imports  for 
;in  equal  amount  in  value  of  our  products,  but  without 


TREASUEY  BEPORT  OF  1845.  235 

any  barter,  where  a  sum  equal  to  tlie  value  of  their  ex- 
ports was  used  in  purchasing  here  an  equal  amount  in 
value  of  any  of  our  products  ;  and  the  shipment  made 
abroad  of  these  products,  upon  the  same  principle  under 
which  a  drawback  of  duties  is  now  allowed  on  the  re- 
exportation of  foreign  imports.  This  would  be  less 
simple,  and  is  not  recommended  in  lieu  of  that  absolute 
reduction  of  the  duties  which  will  accomplish  the  same 
object  of  unrestricted  exchange.  But  such  a  provision 
would  be  a  self-executing  reciprocity  law,  and  should 
be  desired  by  those  believing  in  countervailing  tariffs 
against  foreign  nations,  but  in  reciprocal  free  trade  with 
all,  —  thus  enabling  our  farmers  and  planters  to  sell 
their  products  for  cheaper  foreign  manufactures,  getting 
more  for  what  they  sell,  and  paying  less  for  Avhat  they 
purchase  in  exchange.  It  seems  strange,  that  while  the 
profit  of  agriculture  varies  from  1%  to  8%,  that  of 
manufactures  is  more  than  double.  The  reason  is,  that 
whilst  the  high  duties  secure  nearly  a  monopoly  of  the 
home  market  to  the  manufacturer,  the  farmer  and 
planter  are  deprived  to  a  great  extent  of  the  foreign 
market  by  these  duties.  The  farmer  and  planter  are, 
to  a^reat  extent,  forbidden  to  buy  in  the  foreign  mar- 
ket, and  confined  to  the  domestic  articles  enhanced  in 
price  by  the  duties.  The  tariff  is  thus  a  double  benefit 
to  the  manufacturer,  and  a  double  loss  to  the  farmer 
and  planter,  a  benefit  to  the  former  in  nearly  a  mono- 
poly of  the  home  market,  and  in  enhanced  prices  of 
their  fabrics ;  and  a  loss  to  the  latter  in  the  payment  of 
those  high  prices,  and  a  total  or  partial  exclusion  from 
tlie  foreign  market.  The  true  question  is,  whether  the 
farmer  and  planter  shall,  to  a  great  extent,  supply  our 
})eople  with  cheap  manufactures,  purchased  abroad  with 
their  agricultural  products,  or  whether  this  exchange 
shall  be  forbidden  l)y  high  duties  on  such  manufactures, 
and  their  sujjply  thrown,  as  a  monopoly,  at  large  prices, 


236  ROBERT  J.  WALKER. 

by  liigli  tariffs,  into  the  hands  of  our  own  manufacturers. 
The  number  of  manufacturing  capitalists  who  derive 
the  bene  tit  from  the  heavy  taxes  extracted  by  the  tariff 
from  20,000,000  of  people  does  not  exceed  10,000. 
The  whole  number  (including  the  working  classes  en- 
gaged in  our  manufactures)  deriving  any  benefit  from  the 
tariff  does  not  exceed  400,000,  of  whom  not  more  than 
40,000  have  been  brought  into  this  pursuit  by  the  last 
tariff.  But  this  small  number  of  40,000  would  still 
have  been  in  the  country,  consuming  our  agricultural 
products  ;  and  in  the  attempt  to  secure  them  as  pur- 
chasers, so  small  in  number,  and  not  consuming  one 
half  the  supply  of  many  counties,  the  farmer  and 
planter  are  asked  to  sacrifice  the  markets  of  the  world, 
containing  a  population  of  800,000,000,  disabled  from 
purchasing  our  products  by  our  high  duties  on  all  they 
would  sell  in  exchange.  The  farmer  and  planter  have 
the  home  market  without  a  tariff ;  and  they  would  have 
the  foreign  market  also  to  a  much  greater  extent,  but 
for  the  total  or  partial  prohibition  of  the  last  tariff. 

We  have  more  fertile  lands  than  any  other  nation, 
can  raise  a  greater  variety  of  products,  and,  it  may  be 
said,  could  feed  and  clothe  the  people  of  nearly  all  ...the 
Avorld.  The  home  market,  of  itself,  is  wholly  inade- 
quate for  such  products.  They  must  have  the  foreign 
market,  or  a  large  surplus,  accompanied  by  great  depres- 
sion in  price,  must  be  the  result.  The  States  of  Ohio, 
Indiana,  and  Illinois,  if  cultivated  to  their  fullest  ex- 
tent, could  of  themselves  raise  more  than  sufficient  food 
to  supply  the  entire  home  market.  Missouri  or  Ken- 
tucky could  more  than  supply  it  with  hemp ;  already 
the  State  of  Mississippi  raises  more  cotton  than  is  suf- 
ficient for  all  the  home  market ;  Louisiana  is  rapidly 
approaching  the  same  point  as  to  sugar  ;  and  there  are 
lands  enough  ada])ted  to  that  product  in  Louisiana, 
Texas,  and  Florida,  to  supply  with  sugar  and  molasses 


TREASURY  REPORT  OF  1845.  237 

nearly  all  the  markets  of  the  world.  If  cotton  is  de- 
pressed in  price  by  the  tariff,  the  consequence  must  be 
a  comparative  diminution  of  the  product,  and  the  rais- 
ing in  its  place,  to  a  great  extent,  hemp,  wheat,  corn, 
stock,  and  provisions,  which  otherwise  would  be  sup- 
plied by  the  teeming  products  of  the  West.  The  grow- 
ing West  in  a  series  of  years  must  be  the  greatest 
sufferers  by  the  tariif,  in  depriving  them  of  the  foreign 
market  and  that  of  the  cotton  growing  States.  We 
demand,  in  fact,  for  our  agricultural  products,  specie 
from  nearly  all  the  world,  by  heavy  taxes  upon  all  their 
manufactures  ;  and  their  purchases  from  us  must  there- 
fore b;j  limited,  as  well  as  their  sales  to  us  enhanced  in 
price.  Such  a  demand  for  specie,  which  we  know  in 
advance  cannot  be  complied  with,  is  nearly  equivalent 
to  a  decree  excluding  most  of  our  agricultural  products 
from  the  foreign  markets.  Such  is  the  rigor  of  our 
restrictions  that  nothing  short  of  a  famine  opens  freely 
the  ports  of  Europe  for  our  breadstuffs.  Agriculture 
is  our  chief  employment ;  it  is  best  adapted  to  our 
situation  ;  and,  if  not  depressed  by  the  tariff,  would 
be  the  most  profitable.  We  can  raise  a  larger  surplus 
of  agricultural  products,  and  a  greater  variety,  than 
almost  any  other  nation,  and  at  cheaper  rates.  Re- 
move, then,  from  agriculture  all  our  restrictions,  and 
by  its  own  unfettered  power  it  will  break  down  all 
foreign  restrictions,  and,  ours  being  removed,  would 
feed  the  hungry  and  clothe  the  poor  of  our  fellow 
men  throughout  all  the  densely  peopled  nations  of  the 
world.  But  now  we  will  take  nothing  in  exchange  for 
these  products  but  specie,  except  at  very  high  du- 
ties ;  and  nothing  but  a  famine  breaks  down  all  foreign 
restrictions,  and  opens  for  a  time  the  ports  of  Europe 
to  our  breadstuffs.  If,  on  a  reduction  of  our  duties, 
England  repeals  her  corn  laws,  nearly  all  Europe  must 
follow  her  exauiple  or  give  to  her  manufacturers  ad  van- 


238  ROBERT  J.  WALKER. 

tages  which  cannot  be  snccessfully  encountered  in  most 
of  the  markets  of  the  world.  Tlie  tariff  did  not  raise 
the  price  of  our  breadstuffs ;  but  a  bad  harvest  in  Eng- 
land does,  —  giving  us  for  the  time  that  foreign  market 
which  we  would  soon  have  at  all  times  by  that  repeal 
of  the  corn  laws  which  must  follow  the  reduction  of 
our  duties.  But  whilst  breadstuffs  rise  with  a  bad  har- 
vest in  England,  cotton  almost  invariably  falls ;  because 
the  increased  sum  which,  in  that  event,  England  must 
pay  for  our  breadstuffs,  we  will  take,  not  in  manufac- 
tures, but  only  in  specie  ;  and  not  having  it  to  spare, 
she  brings  down,  even  to  a  greater  extent,  the  price  of 
our  cotton.  Hence  the  result  that  a  bad  harvest  in 
England  reduces  the  aggregate  price  of  our  exports, 
often  turns  the  exchanges  against  us,  carrying  our  spe- 
cie abroad,  and  inflicting  a  serious  blow  on  our  pros- 
perity. Foreign  nations  cannot  for  a  series  of  years 
import  more  than  they  export;  and  if  we  close  our 
markets  against  their  imports  by  high  duties,  they  must 
buy  less  of  our  exports,  or  give  a  lower  price,  or  both. 

Prior  to  the  30th  of  June,  1842,  a  credit  was  given 
for  the  payment  of  duties  ;  since  which  date  they  have 
been  collected  in  cash.  Before  the  cash  duties  and  the 
tariff  of  1842,  our  trade  in  foreign  imports  reexported 
abroad  afforded  large  and  profitable  employment  to  our 
merchants,  and  freight  to  our  commercial  marine,  both 
for  the  inward  and  outward  voyage ;  but  since  the  last 
tariff'  this  trade  is  being  lost  to  the  country,  as  is  proved 
by  the  tables  hereto  annexed.  The  total  amount  of 
foreign  imports  reexported  during  the  three  years 
since  the  last  tariff,  both  of  free  and  dutiable  goods,  is 
$33,384,394,  —  being  far  less  than  in  any  three  years 
(except  during  the  war)  since  1793,  and  less  than  was 
reexported  in  any  one  of  eight  several  years.  The 
highest  aggregate  of  any  three  years  was  $173,108,813, 
and  the  lowest  aggregate  $41,315,705,  —  being  in  the 


TREASURY  REPORT  OF  1845.  239 

years  1794, 1795,  and  1796.  Before  1820  the  free  goods 
are  not  distinguished  in  this  particular  from  the  du- 
tiable goods ;  but  since  that  date  the  returns  show 
the  following  result :  During  the  three  years  since  the 
tariff  of  1842,  the  value  of  dutiable  imports  reexported 
was  $12,590,811,  —  being  less  than  in  any  one  of  seven 
years  preceding  since  1820,  the  lowest  aggregate  of  any 
three  years  since  that  date  being  $14,918,444,  and  the 
highest  $57,727,293.  Even  before  the  cash  duties,  for 
five  years  preceding  the  high  tariff  of  1828,  the  value 
of  dutiable  goods  reexported  was  $94,796,241 ;  and  for 
the  five  years  succeeding  that  tariff,  $66,784,192,  — 
showing  a  loss  of  $28,012,049  of  our  trade  in  foreign 
exports  after  the  tariff  of  1828.  The  diminution  of 
this  most  valuable  branch  of  commerce  has  been  the 
combined  result  of  cash  duties  and  of  the  high  tariff  of 
1842.  If  the  cash  duties  are  retained,  as  it  is  believed 
they  should  be,  the  only  sure  method  of  restoring  this 
trade  is'  the  adoption  of  the  warehousing  system,  by 
which  the  foreign  imports  may  be  kept  in  store  by  the 
government  until  they  are  required  for  reexportation 
abroad,  or  consumption  at  home  —  in  which  latter  con- 
tingency, and  at  the  time  when,  for  that  purpose,  they 
are  taken  out  of  these  stores  for  consumption,  the  du- 
ties are  paid,  and  if  reexported,  they  pay  no  duty,  but 
only  the  expense  of  storage.  Under  the  present  sys- 
tem, the  merchant  introduces  foreign  imports  of  the 
value  of  $100,000.  He  must  now,  besides  the  advance 
for  the  goods,  make  a  further  advance  in  cash,  in  many 
cases,  of  $50,000  for  the  duties.  Under  such  a  system 
but  a  small  amount  of  goods  will  be  imported  for  draw- 
backs ;  and  the  higher  the  duty  the  larger  must  be 
the  advance,  and  the  smaller  the  imports  for  reexporta- 
tion. 

The    imports,   before  payment  of   duties,  under   the 
same  regulations  now  applied  to  our  imports  in  transit  to 


240  IIOBERT  J.   WALKER. 

Canada,  may  be  taken  from  warehouse  to  warehouse  — • 
from  the  East  to  the  lakes,  and  to  Pittsburg,  Cincinnati, 
and  Louisville ;  from  New  Orleans  to  Natchez,  Vicks- 
burg,  Memphis,  and  St.  Louis  — and  warehoused  in 
these  and  other  interior  ports,  the  duties  remaining  un- 
paid until  the  goods  are  taken  out  of  the  warehouse, 
and  out  of  the  original  package  at  such  ports,  for  con- 
sumption ;  thus  carrying  our  foreign  commerce  into  the 
interior,  with  all  the  advantage  of  augmented  business, 
and  cheaper  supplies  throughout  the  country.  It  will 
introduce  into  our  large  ports  on  or  near  the  seaboard, 
assorted  cargoes  of  goods  to  be  r.eexported  with  our 
own,  to  supply  the  markets  of  the  world.  It  will 
cheapen  prices  to  the  consumer,  by  deducting  the  inter- 
est and  profit  that  are  now  charged  upon  the  advance 
of  duty,  —  building  up  the  marts  of  our  own  commerce, 
and  giving  profitable  employment  to  our  own  commer- 
cial marine.  It  will  greatly  increase  our  revenue  by 
augmenting  our  imports,  together  with  our  exports ; 
and  is  respectfully  recommended  to  Congress,  as  an 
important  part  of  the  whole  system  now  proposed  for 
their  consideration. 

The  act  of  the  3d  of  March  last,  allowing  a  drawback 
on  foreign  imports  exported  from  certain  of  our  ports 
to  Canada,  and  also  to  Santa  Fe  and  Chihuahua,  in 
Mexico,  has  gone  to  some  extent  into  effect  under  regu- 
lations prescribed  by  this  department,  and  is  beginning 
to  produce  the  most  happy  results,  especially  in  an  aug- 
mented trade  in  the  su]>ply  of  foreign  exports  to  Canada 
from  our  own  ports.  Indeed,  this  law  must  soon  give 
to  us  the  whole  of  this  valuable  trade  during  the  long 
period  when  the  St.  Lawrence  is  closed  by  ice,  and  a 
large  proportion  of  it  at  all  seasons.  The  result  would 
be  still  more  beneficial,  if  Canada  were  allowed  to  carry 
all  her  exports  to  foreign  nations  in  transitu  through 
our  own  railroads,  rivers,  and  canals,  to  be  shipped  from 


TREASURY  REPORT  OF  1S45.  241 

our  own  ports.  Such  a  system,  whilst  it  would  secure 
to  us  this  valuable  trade,  would  greatly  enlarge  the 
business  on  our  rivers,  lakes,  railroads,  and  canals,  as 
well  as  augment  our  commerce ;  and  would  soon  lead  to 
the  purchase,  by  Canada,  not  only  of  our  foreign  ex- 
ports, but  also,  in  many  cases,  of  our  domestic  products 
and  fabrics,  to  complete  an  assortment.  In  this  man- 
ner our  commercial  relations  with  Canada  would  become 
more  intimate,  and  more  and  more  of  her  trade  every 
year  would  be  secured  to  our  people. 

Connected  with  this  department  and  the  finances  is 
the  question  of  the  sales  of  the  public  lands.  The  pro- 
ceeds of  these  sales,  it  is  believed,  should  continue  to 
constitute  a  portion  of  the  revenue,  diminishing  to  that 
extent  the  amount  required  to  be  raised  by  the  tariff. 
The  net  proceeds  of  these  sales  paid  into  the  treasury 
during  the  last  fiscal  year,  was  $2,077,022.30 ;  and  from 
the  first  sales  in  1787  up  to  the  30th  of  September  last, 
was  $118,007,335.91.  The  average  annual  sales  have 
been  much  less  than  2,000,000  of  acres  ;  yet  the  aggre- 
gate net  proceeds  of  the  sales,  in  1834,  1835,  1836, 
and  1837,  was  $51,268,617.82.  Those  large  sales  were 
almost  exclusively  for  speculation  ;  and  this  can  only  be 
obviated,  at  all  times,  by  confining  the  sales  to  settlers 
and  cultivators  in  limited  quantities,  sufficient  for  farms 
or  plantations.  The  price  at  which  the  public  lands 
should  be  sold  is  an  important  question  to  the  whole 
country,  but  especially  to  the  people  of  the  new  States, 
living  mostly  remote  from  the  seaboard,  and  who  have 
scarcely  felt  the  presence  of,  the  government  in  local 
expenditures,  but  chiefly  in  the  exhaustion  of  their 
means  for  purchases  of  public  lands  and  for  customs. 
The  public  lands  are  not  of  the  same  value ;  yet  they 
are  all  fixed  at  one  unvarying  price,  which  is  far  above 
the  value  of  a  large  portion  of  these  lands.  The  quan- 
tity now  subject  to  entry  at  the  minimum  price  of  $1.25 


242  ROBERT  J.  WALKER. 

per  acre  is  l.S3,:507,457  acres,  and  109,035,345  in  ad- 
dition, to  whicli  tlie  Indian  title  has  been  extinguished, 
—  being  an  aggregate  of  242,342,802  acres,  and  requiring 
a  century  and  a  quarter  to  complete  the  sales  at  the  rate 
they  have  progressed  heretofore,  without  including  any 
of  the  unsold  lands  of  Texas  or  Oregon,  or  of  the  vast 
region  besides  to  which  the  Indian  title  is  not  yet  ex- 
tinguished. It  is  clear,  then,  that  there  is  a  vast  and 
annually-increasing  surplus  of  public  lands,  very  little 
of  which  will  be  sold  within  any  reasonable  period  at 
the  present  price,  and  in  regard  to  which  the  public 
interest  would  be  promoted,  and  the  revenue  augmented 
by  reducing  the  price.  The  reduction  of  the  price  of 
the  public  lands  in  favor  of  settlers  and  cultivators 
would  enhance  the  wages  of  labor.  It  is  an  argument 
urged  in  favor  of  the  tariff,  that  we  ought  to  protect  our 
labor  against  what  is  called  the  pauper  labor  of  Europe. 
But  whilst  the  tariff  does  not  enliance  the  wages  of 
labor,  the  sales  of  the  public  lands  at  low  prices,  and  in 
limited  quantities,  to  st^ttlers  and  cultivators,  would 
accomplish  this  object.  If  those  who  live  by  the  wages 
of  labor  could  purchase  320  acres  of  land  for  $80,  160 
acres  for  .f  40,  or  80  acres  for  f!20,  or  a  40  acre  lot  for 
|ilO,  the  power  of  the  manufacturing  capitalist  in  re- 
ducing the  wages  of  labor  would  be  greatly  diminished  ; 
because,  when  these  lands  were  thus  reduced  in  price, 
those  who  live  by  the  wages  of  labor  could  purchase 
farms  at  these  low  rates,  and  cultivate  the  soil  for  them- 
selves and  families,  instead  of  working  for  others  twelve 
hours  a  day  in  the  manufactories,  lleduce  the  price 
which  the  laborer  must  pay  for  the  public  domain ; 
bring  thus  the  means  of  purchase  within  his  power ; 
prevent  all  speculation  and  monopoly  in  the  public 
lands ;  confine  the  sales  to  settlers  and  cultivators,  in 
limited  quantities  ;  preserve  these  hundreds  of  millions 
of  acres,  for  ages  to  come,  as  homes  for  the  poor  and 


TREASURY  REPORT  OF  1845.  243 

oppressed ;  reduce  the  taxes,  by  reduehig  the  tariff,  and 
bringing  down  the  prices  which  the  poor  are  thus  com- 
pelled to  pay  for  all  the  necessaries  and  comforts  of 
life,  and  more  will  be  done  for  the  benefit  of  American 
labor  than  if  millions  were  added  to  the  profits  of 
manufacturing  capital  by  the  enactment  of  a  protective 
tariff. 

The  Secretary  of  the  Treasury,  on  coming  into  ofiice, 
found  the  revenues  deposited  with  banks.  The  law 
establishing  the  Independent  Treasury  was  repealed,  and 
the  secretary  had  no  power  to  reestablish  that  system. 
Congress  had  not  only  repealed  that  law,  but,  as  a  sub- 
stitute, had  adopted  the  present  system  of  deposit  banks, 
and  prohibited  changing  any  one  of  those  for  another 
bank,  except  for  specified  reasons.  No  alternative  Avas 
left  but  to  continue  the  existing  system  until  Congress 
should  think  proper  to  change  it.  That  change,  it  is 
hoped,  will  now  be  made  by  a  return  to  the  treasury  of 
the  Constitution.  One  of  the  great  evils  of  banks  is  the 
constant  expansion  and  contraction  of  the  currency; 
and  this  evil  is  augmented  by  the  deposits  of  the  rev- 
enue with  banks,  whether  State  or  national.  The  only 
proper  course  for  the  government  is  to  keep  its  own 
money  separate  from  all  banks  and  bankers,  in  its  own 
treasury,  —  whether  in  the  mint,  branch  mints,  or  other 
government  agencies, — and  to  use  only  gold  and  silver 
coin  in  all  receipts  and  disbursements.  The  business 
of  the  country  will  be  more  safe  when  an  adequate 
supply  of  specie  is  kept  within  our  limits,  and  its  cir- 
culation encouraged  by  all  the  means  within  the  power 
of  the  government.  If  this  government  and  the  States 
and  the  people  unite  in  suppressing  the  use  of  specie, 
an  adequate  supjAy,  for  want  of  a  demand,  cannot  be 
kept  within  our  limits,  and  the  condition  of  the  busi- 
ness and  currency  of  the  country  will  be  perilous  and 
uncertain.     It  will  be  completely  within  the  power  of 


244  ROBERT  J.  WALKER. 

the  banks,  whose  paper  will  constitute  the  exclusive 
circulation  of  the  whole  community.  Nor  will  it  be 
useful  to  establish  a  constitutional  treasury,  if  it  is  to 
receive  or  disburse  the  paper  of  banks.  Separation 
from  banks  in  that  case  would  only  be  nominal,  and  no 
addition  would  be  made  to  the  circulation  of  gold  and 
silver. 

Various  forms  of  paper  credit  have  been  suggested, 
as  connected  with  the  operations  of  the  constitutional 
treasury  ;  but  they  are  all  considered  as  impairing  one 
of  the  great  objects  of  such  a  treasury,  namely,  an  aug- 
mented circulation  of  specie.  If  paper,  in  whatever 
form,  or  from  whatever  source  it  may  issue,  should  be 
introduced  as  a  circulation  by  the  constitutional  treas- 
ury, it  would,  precisely  to  that  extent,  diminish  its  use 
as  a  means  of  circulating  gold  and  silver. 

The  constitutional  treasury  could  be  rendered  a  most 
powerful  auxiliary  of  the  mint  in  augmenting  the  specie 
circulation.  The  amount  of  pul)lic  money  which  can  be 
placed  in  the  mint  is  now  limited  by  law  to  $1,000,000 ; 
and  to  that  extent  it  is  now  used  as  a  depository,  and  as 
a  means  of  increasing  our  coinage.  It  is  suggested  that 
this  limitation  may  be  so  modified  as  to  permit  the  use 
of  our  mint  and  branch  mints  for  a  much  larger  sum,  in 
connection  with  the  constitutional  treasury.  The  amount 
of  public  money  received  at  New  York  greatly  exceeds 
that  collected  at  all  other  points,  and  would  of  itself 
seem  to  call  for  a  place  of  public  deposit  there  ;  in  view 
of  which,  the  location  of  a  branch  of  the  mint  of  the 
United  States  at  that  city  would  be  most  convenient 
and  useful.  The  argument  used  against  a  constitutional 
treasury,  of  the  alleged  insecurity  of  the  public  funds 
in  the  hands  of  individuals,  and  especially  the  vast 
amount  collected  at  New  York,  will  be  entirely  obviated 
by  such  an  establishment.  The  mint  of  the  United 
States  has  now  been  in  existence  fifty-two  years.     It 


TBEASURY  REPORT  OF  1845.  245 

has  had  the  custody  of  upwards  of  $114,000,000,  and 
during  this  long  period  of  time  there  never  has  been 
a  loss  of  any  of  its  specie  in  the  mint  by  the  govern- 
ment. The  mint  at  Philadelphia  is  now  conducted  with 
great  efficiency,  by  the  able  and  faithful  officer  at  the 
head  of  that  establishment,  whose  general  supervisory 
authority,  without  leaving  the  parent  mint,  might  still 
be  wisely  extended  to  the  branch  at  New  York.  Be- 
sides the  vitility  of  such  a  branch  as  a  place  for  keeping 
safely  and  disbursing  the  public  money,  it  is  believed 
that  the  coinage  might  be  greatly  augmented  by  the 
existence  of  a  branch  of  the  mint  at  that  great  city.  It 
is  there  that  two  thirds  of  the  revenue  is  annually  col- 
lected,—  the  whole  of  which,  under  the  operation  of 
the  constitutional  treasury,  would  be  received  in  specie. 
Of  that  amount,  a  very  large  sum  would  be  received  in 
coin  of  other  countries,  and  especially  in  foreign  gold 
coins,  —  all  which  could  be  speedily  converted  upon 
the  spot  into  our  own  coins  of  gold  and  silver.  The 
amount  also  of  such  foreign  coin  brought  by  emigrants 
to  the  city  of  New  York  is  very  considerable ;  a  large 
portion  of  which  would  find  its  way  to  the  branch  of 
the  mint  for  re-coinage.  The  foreign  gold  coins  do  not, 
and  it  is  feared  will  not,  circulate  generally  as  a  cur- 
rency, notwithstanding  they  are  made  a  tender  by  law. 
The  rate  at  which  these  coins  are  fixed  by  law  is  not 
familiar  to  the  people  ;  the  denomination  of  such  coin 
is  inconvenient;  the  parts  into  which  it  is  divided  are 
not  decimal ;  the  rates  at  which  it  is  taken  vary  in  dif- 
ferent parts  of  the  Union.  It  is  inconvenient  in  the 
way  of  ready  transfer  in  counting ;  it  is  more  difilcult, 
in  common  use,  to  distinguish  the  genuine  from  the 
counterfeit  foreign  coin;  and  the  stamp  upon  it  is  not 
familiar  to  the  people,  —  from  all  which  causes,  a  for- 
eign gold  coin  does  not,  and  will  not,  circulate  generally 
as  a  currency  among  the  people.     In  many  of  the  banks, 


24G  ROBERT  J.  WALKER. 

nearly  the  whole  of  their  specie  is  kept  in  every  variety 
of  foreign  gold  coin ;  and  when  it  is  tendered  by  them 
in  payment  of  their  notes,  the  great  body  of  the  people, 
not  being  familiar  with  these  coins,  do  not  receive  them  ; 
and  thus  the  circulation  of  a  gold  currency  is,  to  a  great 
extent,  defeated.  If  these  coins  were  converted  at  our 
mint,  or  branch  mints,  into  the  eagle,  the  half  eagle,  and 
quarter  eagle,  we  should  speedily  have  a  large  supply 
of  American  gold  coin,  and  it  would  very  soon  be 
brought  into  common  use  as  a  currency,  and  thus  give 
to  it  greater  stability,  and  greater  security  to  all  the 
business  of  the  country.  A  considerable  amount  of 
foreign  gold  coin  has,  during  the  present  year,  under 
the  directions  of  this  department,  been  converted  into 
American  gold  coin ;  but  the  process  would  be  much 
more  rapid  if  aided  by  the  organization  of  the  consti- 
tu.tional  treasviry,  and  the  establishment  of  a  branch  of 
the  mint  at  the  great  commercial  emporium  of  the 
Union.  With  the  mint  and  branch  mints  as  deposi- 
tories, the  sum  remaining  in  the  hands  of  other  receivers 
of  public  money,  whether  of  lands  or  customs,  would 
be  inconsiderable,  and  the  government  could  be  readily 
protected  from  all  losses  of  such  sums  by  adequate 
bonds,  and  the  power  by  law  to  convict  and  punish  as 
criminals  all  who  embezzle  the  public  moneys. 

It  is  believed,  under  such  a  system,  that  no  defaults 
would  take  place,  and  that  the  public  moneys  Avould  be 
safely  kept  and  disbvirsed  in  gold  and  silver.  This 
government  is  made,  l)y  the  constitution,  the  guardian 
of  a  specie  currency.  That  currency  can  only  be  coined, 
and  its  value  regulated,  by  this  government.  It  is  one 
of  its  first  duties  to  supply  such  a  currency,  by  an  effi- 
cient mint,  and  by  general  regulations  of  the  coinage ; 
but  in  vain  will  it  attempt  to  perform  that  duty,  if, 
when  coin  is  made  or  regulated  in  value,  this  govern- 
ment dispenses  with  its  use,  and  expels  it  from  circu- 


TREASURY  REPORT  OF  1S45.  247 

lation,  or  drives  it  out  of  the  country,  by  substituting 
the  paper  of  banks  in  all  the  transactions  of  the 
government. 

There  is  nothing  which  will  advance  so  surely  the 
prosperity  of  the  country  as  an  adequate  supply  of 
specie,  diffused  throughout  every  portion  of  the  Union, 
and  constituting,  to  a  great  extent,  the  ordinary  circu- 
lation everywhere  among  the  people.  It  is  a  currency 
that  will  never  break  nor  fail ;  it  will  neither  expand 
nor  contract  beyond  tlie  legitimate  business  of  the 
country  ;  it  will  lead  to  no  extravagant  speculations 
at  one  time,  to  be  followed  by  certain  depression  at 
another;  nor  will  labor  ever  be  robbed  of  its  reward  by 
the  depreciation  of  such  currency.  There  is  no  danger 
that  we  sliall  have  too  much  gold  and  silver  in  actual 
circulation,  or  too  small  an  amount  of  bank  paper,  or 
that  any  injury  ever  will  be  inflicted  upon  the  business 
of  the  country,  by  a  diminution  of  the  circulation  of  the 
paper  of  banks,  and  the  substitution  in  its  place,  to  that 
extent,  of  gold  and  silver.  Even  their  most  ardent  ad- 
vocates must  admit  that  banks  are  subject  to  periodical 
expansions  and  contractions,  and  that  this  evil  would 
be  increased  by  giving  them  the  funds  of  the  govern- 
ment to  loan,  and  by  receiving  and  disbursing  nothing 
but  their  paper. 

It  is  believed  that  the  permanent  interest  of  every 
class  of  the  people  will  be  advanced  by  the  establish- 
ment of  the  constitutional  treasury,  and  that  the  manu- 
facturers especially  will  derive  great  benefit  from  its 
adoption.  It  will  give  stability  to  all  their  operations, 
and  insure  them,  to  a  great  extent,  against  those  fluc- 
tuations, expansions,  and  contractions  of  the  currency 
so  prejudicial  to  their  interests.  By  guarding  against 
inflations  of  the  currency,  it  will  have  a  tendency  to 
check  periodical  excesses  of  foreign  importations  pur- 
chased  in   fact  upon   cucdit  ;  while  loans  from  banks 


248  ROBERT  J.  WALKER. 

or  dangerous   enlargements  of  their  business,  and  ex- 
cessive issues  of  their  paper  will  be  greatly  diminished. 
Whilst  a  sound  and  stable  currency  guards  the  manu- 
facturer against  excessive   importations    from   abroad, 
it  protects  him  from  disasters  at  home,  and  from  those 
ruinous   revulsions   in  which   so   many  thousands  are 
reduced  to  bankruptcy.     The  tariff,  if  followed,  as  in 
the  absence  of  adequate  checks  it  certainly  soon  will 
be,  by  an  inflated  currency,  whilst  it  thus  enhances  the 
expenses  of  manufacturing  at  home,  will  speedily  and 
certainly  raise  prices  up  to  the  whole  amount  of   the 
duty,  so  as  to  repeal  the  operation  of  that  duty  in  favor 
of  the  manufacturer,  and  enable  the  foreign  importer 
again  to  flood  the  market  at  the  enhanced  prices  arising 
from    an   inflated   currency.     But    soon   the    revulsion 
comes,   and   all    are  overwhelmed   in   a  common   ruin. 
The  currency  is  reduced  below  the  wants  of  the  coun- 
try by  a  sudden  and  ruinous  contraction ;  and  the  labor 
and  industry  of  years  are  required  to  repair  the  mis- 
chief.    Stability,  both  in  the  tariff  and  the  currency,  is 
what  the  manufacturer  should  most   desire.     Let   the 
tariff  be  permanently  adjusted  by  a  return  to  reasonable 
and  moderate  revenue  duties,  which,  even  when  imposed 
truly  and  in  good  faith  for  that  purpose,  will  yield  suf- 
ficient advantage  to  afford   reasonable  profits ;  and  let 
this  permanent  system  (and  none  other  can  be  perma- 
nent) be  established,  and  accompanied  by  a  stable  cur- 
rency, and  the  manufacturer  in  a  series  of  years  will 
derive  the  greatest  benefits  from  the  system.     The  pre- 
sent system  cannot  be  permanent.     It  is  too  unequal 
and   unjust,    too   exorbitant    and   oppressive,    and   too 
clearly  in  conflict  with  the  fimdamental  principles  of 
the  Constitution.     If  the  manufacturer  thinks  that  this 
system  can  be  permanent,  let  liim  look  to  the  constant 
changes  which  have  attended  all  attempts  to  establish 
and  continue  a  protective  tariff.     The  first   tariff  was 


TREASURY  REPORT  OF  1S45.  249 

based  in  part  upon  the  principle  of  very  moderate  pro- 
tection to  domestic  manufactures  ;  and  tlie  result  has 
been,  as  appears  by  the  table  hereto  annexed,  that  the 
taritf  has  been  changed  and  modified  thirty  times  since 
that  period,  —  being  more  than  once,  on  an  average, 
for  every  Congress  since  the  government  was  founded ; 
and  one  of  these  tariffs  was  in  itself  a  system  of  suc- 
cessive biennial  changes,  operating  through  a  period  of 
ten  years.  Of  these  changes,  fourteen  have  been  gen- 
eral, and  sixteen  special.  From  1816  onward,  these 
changes  have  been  most  frequent ;  and  it  is  vain  to 
expect  permanency  from  anything  but  a  revenue  tariff. 
Stability  is  what  the  manufacturer  should  desire,  and 
especially  that  the  question  should  be  taken  out  of  the 
arena  of  politics  by  a  just  and  permanent  settlement. 
A  great  number  of  tables  illustrative  of  the  effects  of 
the  tariff,  compiled  from  official  documents,  accompany 
this  report.  Some  of  these  tables  exhibit  the  opera- 
tion of  each  of  our  tariffs  from  the  organization  of  the 
government  to  the  present  period.  In  order  to  enable 
the  Secretary  to  comply  with  the  direction  of  the  acts 
of  Congress,  requiring  him  in  his  annual  report  to  sug- 
gest "  plans  for  improving  or  increasing  the  revenues," 
and  to  give  "  information  to  Congress  in  adopting  modes 
of  raising"  the  revenue,  two  circulars  were  issued, 
published  and  generally  distributed,  propounding  vari- 
ous questions  connected  with  this  subject,  and  request- 
ing rejilies.  Some  answers  have  been  received  from 
friends  as  well  as  op})onents  of  the  tariff ;  but  the  Sec- 
retary regrets  that  the  manufacturers,  with  very  few 
exceptions,  have  declined  answering  these  questions, 
or  communicating  any  information  as  regards  their 
profits  and  surplus,  or  in  relation  to  the  wages  of  labor. 
An  abstract  of  all  that  is  deemed  useful  in  these  replies, 
together  with  a  copy  of  both  the  circulars,  is  appended 
to  this  report. 


250  liOHERT  J.   WALKER. 

The  coast  survey  is  rapidly  progressing,  having  been 
extended  eastward  to  the  eastern  coast  of  Massachu- 
setts, and  soiithward  nearly  to  the  dividing  line  of 
Maryland  and  A^irginia,  on  the  Chesapeake.  Two  new 
centres  of  operation  have  been  o^xnied  under  the  sanc- 
tion of  this  department,  in  North  Carolina,  and  on  the 
(Julf  of  Mexico,  from  which  the  work  may  be  spread 
until  the  parts  unite.  Important  positions  for  forts, 
navy  yards,  harbors,  and  lighthouses,  present  themselves 
along  this  interesting  portion  of  the  coast  of  Louisiana, 
Mississippi,  and  Alabama,  and  the  islands  guarding 
the  interior  channel  between  Mobile  and  New  Orleans. 
Great  economy  exists  in  the  administration  of  the  fund 
appropriated  for  the  coast  survey ;  and  every  effort  is 
made  by  the  superintendent  to  press  the  work  onward  to 
a  completion  ;  and  his  report  in  detail  will  be  hereafter 
submitted  to  Congress.  Three  charts,  resulting  from  the 
survey,  have  been  published  within  the  past  year,  and 
five  more  are  nearly  ready  for  publication.  This  great 
work  is  most  honorable  to  the  science  of  our  country, 
most  useful  to  our  navy  and  commercial  marine,  and,  in 
connection  with  our  lighthouses,  must  decrease  the  cost 
of  freight  and  insurance,  as  well  as  the  risk  of  life  and 
property.  Great  attention  has  been  given  by  this  depart- 
ment to  the  very  important  subject  of  our  lighthouse  sys- 
tem. The  various  improvements  suggested  by  experience 
at  home  or  abroad ;  the  relative  advantages  of  gas  or  oil, 
of  reflectors,  lenticular  and  revolving  lights  ;  the  location 
and  construction  of  the  buildings,  as  well  as  the  mode 
of  keeping  the  lights,  are  all  being  fully  and  carefully 
investigated,  and  a  report,  it  is  believed,  will  be  ready 
during  the  present  session  of  Congress.  From  the 
Chesapeake  to  the  capes  of  Florida,  and  thence  west- 
ward, our  coast  is  badly  lighted,  as  well  as  the  great 
lakes  of  the  Northwest ;  and  numerous  wrecks,  often 
accompanied  with  loss  of  life  and  property,  seem  to  re- 
quire the  interposition  of  Congress. 


TREASURY  REPORT  OF  1S45.  251 

Such  portions  of  the  charts  of  the  exploring  expedi- 
tion as  were  placed  under  the  charge  of  this  department 
were  distributed  for  the  benefit  of  our  whale  ships. 
These  valuable  charts  embrace  the  survey  of  many 
hitherto  almost  unexplored  regions  and  islands  of  the 
Pacific,  as  well  as  a  part  of  the  coast  of  Oregon,  and 
must  be  eminently  useful  for  many  purposes,  but  espe- 
cially to  our  seamen  and  merchants  engaged  in  the 
whale  fishery.  In  pursuance  of  a  resolution  of  Con- 
gress, a  report  is  in  progress  of  preparation  as  regards 
the  banks  and  currency,  and  also  in  relation  to  statis- 
tics ;  and  these,  with  all  other  reports  recpiired  from 
this  department,  will  be  presented  at  the  earliest  prac- 
ticable period  of  the  present  session. 

In  presenting  his  annual  report,  in  obedience  to  the 
law,  the  Secretary  of  the  Treasury  submits  his  views 
with  undissembled  diffidence,  consoled  by  the  reflection 
that  all  his  errors  of  judgment  will  be  corrected  by  the 
superior  wisdom  of  the  tAvo  Houses  of  Congress,  guided 
and  directed  by  that  overruling  Providence  which  has 
blessed  the  unexampled  progress  of  this  great  and 
happy  Union. 

Pv.  J.  AVALKER, 

Secretarij  of  the  Treasurij. 

Hon.  JOHN  W.  DAVIS, 

Speaker  of  the  House  of  Representatives. 


SPEECH    OF    HENRY  CLAY   ON    AMERICAN 

INDUSTRY, 

IN  THE  HOUSE  OF  REPRESENTATIVES,  MARCH  30  AND 

31,  1S24. 

The  gentleman  from  Virginia  [Mr.  Barbour]  has  em- 
braced the  occasion  produced  by  the  proposition  of  the 
gentleman  from  Tennessee  to  strike  out  the  minimum 
price  in  the  bill  on  cotton  fabrics,  to  express  his  senti- 
ments at  large  on  the  policy  of  the  pending  measure  ; 
and  it  is  scarcely  necessary  for  me  to  say  that  he  has 
evinced  his  usual  good  temper,  ability,  and  decorum. 
The  parts  of  the  bill  are  so  intermingled  and  interwoven 
tosrether  that  there  can  be  no  doubt  of  the  fitness  of 
this  occasion  to  exhibit  its  merits  or  its  defects.  It  is 
my  intention,  Avitli  the  i)ermission  of  the  committee,  to 
avail  myself  also  of  this  opportunity,  to  present  to  its 
consideration  those  general  views,  as  they  appear  to  me, 
of  the  true  policy  of  this  country,  which  imperiously 
demand  the  passage  of  this  bill.  I  am  deeply  sensible, 
jVlr.  Chairman,  of  the  high  responsibility  of  my  present 
situation.  But  that  responsibility  inspires  me  with  no 
other  apprehension  than  that  I  shall  be  unable  to  ful- 
iill  my  duty ;  with  no  other  solicitude  than  that  I  may, 
at  least,  in  some  small  degree,  contribute  to  recall  my 
country  from  the  pursuit  of  a  fatal  policy,  which  appears 
to  me  inevitably  to  lead  to  its  impoverishment  and  ruin. 
I  do  feel  most  aAvfully  this  responsibility.  And  if  it 
were  allowable  for  us  at  the  present  day  to  imitate  an- 
cient examples,  I  would  invoke  the  aid  of  the  Most 
High.  I  would  anxiously  and  fervently  implore  his 
divine  assistance  :  that  He  would  be  graciously  pleased 


SPEECH  OF  1S24.  253 

to  shower  on  my  country  his  richest  blessings  ;  and 
that  He  would  sustain,  on  this  interesting  occasion,  the 
humble  individual  Avho  stands  before  Him,  and  lend 
him  the  power,  moral  and  physical,  to  perform  the  sol- 
emn duties  which  now  belong  to  his  public  station. 

Two  classes  of  politicians  divide  the  people  of  the 
United  States.  According  to  the  system  of  one,  the 
produce  of  foreign  industry  should  be  subjected  to  no 
other  impost  than  such  as  may  be  necessary  to  provide 
a  public  revenue ;  and  the  produce  of  American  indus- 
try should  be  left  to  sustain  itself,  if  it  can,  with  no 
other  than  that  incidental  protection,  in  its  coin[)etition, 
at  home  as  well  as  abroad,  with  rival  foreign  articles. 
According  to  the  system  of  the  other  class,  whilst  they 
agree  that  the  imposts  should  be  mainly,  and  may  under 
any  modification  be  safely,  relied  on  as  a  fit  and  con- 
venient source  of  public  revenue,  they  would  so  adjust 
and  arrange  the  duties  on  foreign  fabrics  as  to  afford  a 
gradual  but  adequate  protection  to  Ameripan  industry, 
and  lessen  our  dependence  on  foreign  nations,  by  secur- 
ing a  certain  and  ultimately  a  cheaper  and  better  sup- 
ply of  our  own  wants  from  our  own  abundant  resources. 
Both  classes  are  equally  sincere  in  their  respective  opin- 
ions, equally  honest,  equally  patriotic,  and  desirous  of 
advancing  the  prosperity  of  the  country.  In  the  discus- 
sion and  consideration  of  these  opposite  opinions  for 
the  purpose  of  ascertaining  which  has  the  support  of 
truth  and  reason,  we  should,  therefore,  exercise  every 
indulgence  and  the  greatest  spirit  of  mutual  modera- 
tion and  forbearance.  And  in  our  deliberations  on  this 
great  question,  we  should  look  fearlessly  and  truly  at 
the  actual  condition  of  the  country,  retrace  the  causes 
which  have  brought  us  into  it,  and  snatch,  if  possible, 
a  view  of  the  future.  We  should,  above  all,  consult 
experience  —  the  experience  of  other  nations,  as  well 
as  our  own  —  as  our  truest  and  most  unerring  guide. 


254  HENRY  CLAY. 

In  casting  our  eyes  around  us,  tlie  most  prominent 
circumstance  which  fixes  our  attention  and  challenges 
our  deepest  regret  is  the  general  distress  which  per- 
vades the  Avhole  country.  It  is  forced  u})()n  us  by  nu- 
merous facts  of  the  most  incontestable  character.  It 
is  indicated  by  the  diminished  exports  of  native  pro- 
duce ;  by  the  depressed  and  reduced  state  of  our  foreign 
navigation  ;  by  our  diminished  commerce  ;  by  successive 
unthrashed  crops  of  grain,  perishing  in  our  barns  and 
barn-yards  for  the  want  of  a  market ;  by  the  alarming 
diminution  of  the  circulating  medium  ;  by  the  numerous 
bankruptcies,  not  limited  to  the  trading  classes,  but 
extending  to  all  orders  of  society ;  by  a  universal  com- 
plaint of  the  Avant  of  employment,  and  a  consequent 
reduction  of  the  wages  of  labor ;  by  the  ravenous  pursuit 
after  public  situations,  not  for  the  sake  of  their  honors 
and  the  performance  of  their  public  duties,  but  as  a 
means  of  private  subsistence  ;  by  the  reluctant  resort 
to  the  perilc^;s  use  of  paper  money  ;  by  the  intervention 
of  leirislation  in  the  delicate  relation  between  debtor 
and  creditor ;  and,  above  all,  by  the  low  and  depressed 
state  of  the  value  of  almost  every  description  of  the 
whole  mass  of  the  property  of  the  nation,  "which  has,  on 
an  average,  sunk  not  less  than  about  fifty  per  centum 
within  a  few  years.  This  distress  pervades  every  part 
of  the  Union,  every  class  of  society ;  all  feel  it,  though 
it  may  be  felt  at  different  places,  in  diiferent  degrees. 
It  is  like  the  atmosphere  which  surrounds  us,  —  all 
miist  inhale  it,  and  none  can  escape  it.  In  some  places 
it  has  burst  upon  our  people,  without  a  single  mitigat- 
ing circumstance  to  temper  its  severity.  In  others, 
more  fortunate,  slight  alleviations  have  been  experi- 
enced in  the  expenditure  of  the  public  revenue,  and  in 
other  favoring  causes.  A  few  years  ago  the  planting 
interest  consoled  itself  with  its  happy  exemptions,  but 
it  has  now  reached  this  interest  also,  which  experiences, 


SPEECH  OF  1S24.  255 

though  with  less  severity,  the  general  suffering.  It  is 
most  painful  to  me  to  attempt  to  sketch  or  to  dwell  on 
the  gloom  of  this  picture.  But  I  have  exaggerated, 
nothing.  Perfect  fidelity  to  the  original  would  have 
authorized  me  to  have  thrown  on  deeper  and  darker 
hues.  And  it  is  the  duty  of  the  statesman,  no  less  than 
that  of  the  physician,  to  survey,  with  a  penetrating, 
steady,  and  undismayed  eye,  the  actual  condition  of  tlie 
subject  on  which  he  would  operate  ;  to  probe  to  the 
bottom  the  diseases  of  the  body  politic,  if  he  would 
apply  efficacious  remedies.  We  have  not,  thank  God, 
suffered  in  any  great  degree  for  food.  But  distress 
resulting  from  the  absence  of  a  sujjply  of  the  mere 
phj'sical  wants  of  our  nature,  is  not  the  only  nor  per- 
haps the  keenest  distress  to  which  we  may  be  exposed. 
Moral  and  pecuniary  suffering  is,  if  possible,  more  poi- 
gnant. It  plunges  its  victim  into  hopeless  despair.  It 
poisons,  it  paralyzes  the  spring  and  source  of  all  useful 
exertion.  Its  unsparing  action  is  collateral  as  well  as 
direct.  It  falls  with  inexorable  force  at  the  same  time 
upon  the  wretched  family  of  embarrassment  and  insol- 
vency and  u})on  its  head.  They  are  a  faithful  mirror, 
reflecting  back  upon  him  at  once  his  own  frightful 
image,  and  that  no  less  appalling  of  the  dearest  objects 
of  his  affection.  What  is  the  cause  of  this  wide-spread- 
ing distress,  of  this  deep  depression,  Avhich  we  behold 
stamped  on  the  public  countenance  ?  We  are  the  same 
people.  We  have  the  same  country.  We  cannot  ar- 
raign the  bounty  of  I'rovidence.  The  showers  still  fall 
in  the  same  grateful  abundance.  The  sun  still  casts 
his  genial  and  vivifying  influence  upon  the  land ;  and 
the  land,  fertile  and  diversified  in  its  soils  as  ever, 
yields  to  the  industrious  cultivator  in  boundless  profu- 
sion its  accustomed  fruits,  its  richest  treasures.  Our 
vigor  is  unimpaired.  Our  industry  has  not  relaxed. 
If  ever  the  accusation  of  wasteful  extravagance  could 


25G  UENRY  CLAY. 

be  made  against  our  people,  it  cannot  now  be  justly  pre- 
ferred. They,  on  the  contrary,  for  the  few  last  years  at 
least,  have  been  practicing  the  most  rigid  economy.  The 
causes,  then,  of  our  present  attiiction,  whatever  they 
may  be,  are  human  causes,  and  human  causes  not 
chargeable  upon  the  people,  in  their  private  and  indi- 
vidual relations. 

What,  again  I  would  ask,  is  the  cause  of  the  unhappy 
condition  of  our  country,  which  I  have  faintly  depicted  ? 
It  is  to  be  found  in  the  fact  that,  during  almost  the 
whole  existence  of  this  government,  we  liave  shaped 
our  industry,  our  navigation,  and  our  commerce,  in  ref- 
erence to  an  extraordinary  war  in  Europe,  and  to  foreign 
markets  which  no  longer  exist ;  in  the  fact  that  we 
have  depended  too  much  upon  foreign  sources  of  supply, 
and  excited  too  little  the  native ;  in  the  fact  that,  whilst 
we  have  cultivated,  with  assiduous  care,  our  foreign  re- 
sources, we  have  suffered  those  at  home  to  wither  in  a 
state  of  neglect  and  abandonment.  The  consequence  of 
the  termination  of  the  war  of  Europe  has  been  the  re- 
sumption of  European  commerce,  European  navigation, 
and  the  extension  of  European  agriculture  an.d  European 
industry  in  all  its  branches.  Europe,  therefore,  has  no 
longer  occasion,  to  anything  like  the  same  extent  as 
that  she  had  during  her  wars,  for  American  commerce, 
American  navigation,  the  produce  of  American  industry, 
Europe,  in  commotion,  and  convulsed  throughout  all  her 
members,  is  to  America  no  longer  the  same  Europe  as 
she  is  now,  tran(|uil,  and  watching  with  the  most  vigi- 
lant attention  all  her  own  peculiar  interests  without  re- 
gard to  the  operation  of  her  policy  upon  us.  The  effect 
of  this  altered  state  of  Europe  upon  us  has  been,  to 
circumscribe  the  employment  of  our  marine,  and  greatly 
to  reduce  the  value  of  the  produce  of  our  territorial 
labor.  The  further  effect  of  this  twofold  reduction  has 
been  to  decrease  the  value  of  all  property,  whether  on 


SPEECH  OF  1S24.  257 

the  land  or  on  the  ocean,  and  which  I  suppose  to  be 
about  fifty  per  cent.     And  the  still  further  effect  has 
been  to  diminish  the  amount  of  our  circulating  medium, 
in  a  proportion  not  less,  by  its  transmission  abroad,  or 
its    withdrawal   by   the   banking   institutions,    from   a 
necessity  which  they  could  not  control.     The  quantity 
of  money,  in  whatever  form  it  may  be,  which  a  nation 
wants,  is  in  proportion  to  the  total  mass  of  its  wealth, 
and  to  the  activity  of  that  wealth.     A  nation  that  has 
but  little  wealth  has  but  a  limited  want  of  money.     In 
stating  the  fact,  therefore,  that  the  total  wealth  of  the 
country  has  diminished,  within  ^  few  years,  in  a  ratio  of 
about  fifty  per  cent,  we  shall  at  once  fully  comprehend 
the  inevitable  reduction  which  must  have  ensued  in  the 
total  quantity  of  the  circulating  medium  of  the  country. 
A  nation  is  most  prosperous  when  there  is  a  gradual 
and  untempting  addition  to  the  aggregate  of  its  circu- 
lating medium.     It  is  in  a  condition  the  most  adverse, 
when  there  is  a  rapid  diminution  in  the  quantity  of  the 
circulating  medium,  and  a  consequent  depression  in  the 
value  of  property.     In  the  former   case  the  wealth  of 
individuals    insensibly   increases,    and    income    keeps 
ahead  of  expenditure.     But  in  the  latter  instance,  debts 
have  been  contracted,  engagements  made,  and  habits  of 
expense  established  in  reference  to  the  existing  state  of 
wealth  and  of  its  representative.     When  these  come  to 
be  greatly  reduced,   individuals   find    their   debts  still 
existing,    their    engagements     unexecuted,    and    their 
habits  inveterate.     They  see  themselves  in  the  posses- 
sion of  the  same  property,  on  which,  in  good  faith,  they 
had   bound   themselves.      But  that   property,   without 
their  fault,  possesses   no  longer  the  same  value  ;  and 
hence  discontent,  impoverishment  and  ruin  arise.     Let 
us  suppose,  Mr.  Chairman,  that  Europe  was  again  the 
theatre  of  such  a  general  war  as  recently  raged  through- 
out all  her  dominions,  —  such  a  state  of  the  war  as  ex- 


258  HENRY  CLAY. 

isted  in  her  greatest  exertions  and  in  our  greatest  pros- 
perity ;  instantly  there  wonkl  arise  a  greedy  demand  for 
the  surphis  prodnce  of  onr  industry,  for  our  commerce, 
for  our  navigation.     The  languor  which  now  prevails  in 
our  cities  and  in  our  seaports  would  give  way  to  an 
animated   activity.      Our    roads    and   rivers  would   be 
crowded  with  the  produce  of  the  interior.     Everywhere 
we   should   witness    excited   industry.      The    precious 
metals   would    reflow   from    abroad  upon   us.      Banks 
which  have  maintained  their  credit  would  revive  their 
business  ;  and  new  banks  would  be  established  to  take 
the  place  of  those  which  have  sunk  beneath  the  general 
pressure.      For  it  is  a  mistake  to   suppose   that   they 
have  produced  our  present  adversity ;  they  may  have 
somewhat  aggravated  it,  but  they  were  the  effect  and 
the  evidence  of  our  prosperity.     Prices  would  again  get 
up  ;  the  former  value  of  property  would  be    restored. 
And  those  embarrassed   persons   who    have    not  been 
already    overwhelmed    by  the    times  would    suddenly 
hnd,  in  the  augmented  value  of  their  property,  and  the 
renewal   of   their   business,  ample   means    to  extricate 
themselves  from   all    their  difficulties.      The    greatest 
want  of  civilized  society  is  a  market  for  the  sale  and 
exchange  of  the  surplus  of  the  produce  of  the  labor  of 
its  members.    This  market  may  exist  at  home  or  abroad, 
or  both  ;  but  it  must  exist  somewhere,  if  society  pros- 
pers ;  and  wherever  it  does  exist,  it  should  be  compe- 
tent to  the  absorption  of  the  entire  surplus  of  production. 
It  is  most  desirable  that  there  should  be  both  a  home 
and  a  foreign  market.    But  with  respect  to  their  relative 
superiority,  I  cannot  entertain  a  doubt.    The  home  mar- 
ket is  first  in  order,  and  paramount  in  importance.    The 
object  of  the  bill  under  consideration  is,  to  create  this 
home  market,  and  to  lay  the  foundations  of  a  genuine 
American  policy.     It  is  opposed ;  and  it  is  incumbent 
upon  the  partis9,ns  of  the  foreign  policy  (terms  which 


SPEECH  OF  1824.  259 

I  shall  use  Avithout  any  invidious  intent)  to  demon- 
strate that  the  foreign  market  is  an  adequate  vent  for 
the  surplus  produce  of  our  labor.  But  is  it  so  ?  First, 
foreign  nations  cannot,  if  they  would,  take  our  surplus 
produce.  If  the  source  of  supply,  no  matter  of  what, 
increases  in  a  greater  ratio  than  the  demand  for  that 
supply,  a  glut  of  the  market  is  inevitable,  even  if  we 
suppose  both  to  remain  perfectly  unobstructed.  The 
duplication  of  our  population  takes  place  in  terms  of 
about  twenty-five  years.  The  term  will  be  more  and 
more  extended  as  our  numbers  multiply.  But  it  will 
be  a  sufficient  approximation  to  assume  this  ratio  for 
the  present.  We  increase,  therefore,  in  population,  at 
the  rate  of  about  4%  per  annum.  Supposing  the  in- 
crease of  our  production  to  be  in  the  same  ratio,  we 
should,  every  succeeding  year,  have  of  surplus  produce 
4%  more  than  that  of  the  preceding  year,  without  tak- 
ing into  the  account  the  differences  of  seasons  which 
neutralize  each  other.  If,  therefore,  we  are  to  rely 
upon  the  foreign  market  exclusively,  foreign  consump- 
tion ought  to  be  shown  to  be  increasing  in  the  same 
ratio  of  4%  per  annum,  if  it  be  an  adequate  vent  for 
our  surplus  produce.  But,  as  I  have  supposed  the 
measure  of  our  increasing  production  to  be  furnished 
by  that  of  our  increasing  population,  so  the  measure 
of  their  power  of  consumption  must  be  determined  by 
that  of  the  increase  of  their  population.  Now,  the  total 
foreign  population,  who  consume  our  surplus  produce, 
upon  an  average,  do  not  double  their  aggregate  number 
in  a  shorter  term  than  that  of  about  one  hundred  years. 
( )ur  powers  of  production  increase,  then,  in  a  ratio  four 
times  greater  than  their  powers  of  consumption.  And 
hence  their  utter  inability  to  receive  from  us  our  sur- 
plus produce. 

But,  secondly,  if  they  could,  they  will  not.    The  policy 
of  all  Europe  is  adverse  to  the  reception  of  our  agricul- 


2G0  HENRY  CLAY. 

tural  produce,  so  far  as  it  conies  into  collision  with  its 
own  ;  and  under  that  limitation  we  are  absolutely  forbid 
to  enter  their  ports,  except  under  circumstances  which 
deprive  them  of  all  value  as  a  steady  market.  The 
policy  of  all  Europe  rejects  those  great  staples  of  our 
country  which  consist  of  objects  of  human  subsist- 
ence. The  policy  of  all  Eiirope  refuses  to  receive  from 
us  anything  but  those  raw  materials  of  smaller  value, 
essential  to  their  manufactures,  to  which  they  can  give 
a  higher  value,  with  the  exception  of  tobacco  and  rice, 
whieli  they  cannot  produce.  Even  Great  Britain,  to 
which  we  are  its  best  customer,  and  from  which  we 
receive  nearly  one  half  in  value  of  our  whole  imports, 
will  not  take  from  us  articles  of  subsistence  produced 
in  our  country  cheaper  than  can  be  produced  in  Great 
Britain.  In  adopting  this  exclusive  policy,  the  states 
of  Europe  do  not  inquire  what  is  best  for  U-S,  but  what 
suits  themselves  respectively ;  they  do  not  take  juris- 
diction of  the  question  of  our  interests,  but  limit  the 
object  of  their  legislation  to  that  of  the  conservation  of 
their  own  peculiar  interests,  leaving  us  free  to  prose- 
cute ours  as  we  please.  They  do  not  guide  themselves 
by  that  romantic  philanthropy  which  we  see  displayed 
here,  and  which  invokes  us  to  continue  to  purchase  the 
produce  of  foreign  industry,  without  regard  to  the  state 
or  prosperity  of  our  own,  that  foreigners  may  be  pleased 
to  purchase  the  few  remaining  articles  of  ours  which 
their  restricted  policy  has  not  yet  absolutely  excluded 
from  their  consumption.  What  sort  of  a  figure  would  a 
member  of  the  British  Parliament  have  made,  Avhat  sort 
of  a  reception  would  his  opposition  have  obtained,  if  he 
had  remonstrated  against  the  passage  of  the  corn-law, 
by  Avhich  British  consumption  is  limited  to  the  bread- 
stuffs  of  British  production,  to  the  entire  exclusion  of 
American,  and  stated  that  America  could  not  and  would 
not  buy  British  manufactures,  if  Britain  did  not  buy 
American  flour  ? 


SPEECH  OF  1824.  261 

Both  the  inability  and  the  policy  of  foreign  powers, 
then,  forbid  us  to  rely  upon  the  foreign  market,  as  be- 
ing an  adequate  vent  for  the  surplus  produce  of  Ameri- 
can labor.  Now  let  us  see  if  this  general  reasoning  is 
not  fortified  and  confirmed  by  the  actual  experience  of 
this  country.  If  the  foreign  market  may  be  safely 
relied  upon,  as  furnishing  an  adequate  demand  for  our 
surplus  produce,  then  the  ofiicial  documents  will  show 
a  progressive  increase  from  year  to  year  in  the  exports 
of  our  native  produce,  in  proportion  equal  to  that  which 
I  have  suggested.  If,  on  the  contrary,  we  shall  find 
from  them  that,  for  a  long  term  of  past  years,  some 
of  our  most  valuable  staples  have  retrograded,  some 
remained  stationary,  and  others  advanced  but  little,  if 
any,  in  amount,  with  the  exception  of  cotton,  the  deduc- 
tions of  reason  and  the  lessons  of  experience  will  alike 
command  us  to  withdraw  our  confidence  in  the  compe- 
tency of  the  foreign  market.  The  total  amount  of  all 
our  exports  of  domestic  produce  for  the  year  beginning 
in  1795,  and  ending  on  the  30th  September,  1796,  was 
$40,764,097.  Estimating  the  increase  according  to  the 
ratio  of  the  increase  of  our  population,  that  is,  at  4% 
per  annum,  the  amount  of  the  exports  of  the  same  pro- 
duce, in  the  year  ending  on  the  30th  of  September  last, 
ought  to  have  been  $85,420,861.  It  was  in  fact  only 
$47,155,408.  Taking  the  average  of  five  years,  from 
1803  to  1807,  inclusive,  the  amount  of  native  prodiice 
exported  was  $43,202,751  for  each  of  those  years.  Es- 
timating wliat  it  ought  to  have  been,  during  the  last 
year,  applying  the  principle  suggested  to  that  amount, 
there  should  have  been  exported  $77,760,751,  instead  of 
$47,155,408.  If  these  comparative  amounts  of  the  ag- 
gregate actual  exports,  and  what  they  ought  to  have 
been,  be  discouraging,  we  shall  find,  on  descending  into 
particulars,  still  less  cause  of  satisfaction.  The  export 
of  tobacco  in  1791  was  112,428  hogsheads.    That  was  the 


262  HENRY  CLAY. 

year  of  the  largest  exportation  of  that  article ;  but  it 
is  the  only  instance  in  which  I  have  selected  the  maxi- 
mum of  exportation.  The  amount  of  what  we  ought 
to  have  exported  last  year,  estimated  according  to  the 
scale  of  increase  which  I  have  used,  is  266,332  hogs- 
heads. The  actual  export  was  99,009  hogsheads.  We 
exported,  in  1803,  the  quantity  of  1,311,853  barrels  of 
flour,  and  ought  to  have  exported  last  year  2,361,333 
barrels.  We  in  fact  exported  only  756,702  barrels.  Of 
that  quantity  we  sent  to  South  America  150,000  barrels, 
according  to  a  statement  furnished  me  by  the  diligence 
of  a  friend  near  me  [Mr.  Poinsett]  to  whose  valuable 
mass  of  accurate  information  in  regard  to  that  inter- 
esting quarter  of  the  world  I  have  had  occasion  fre- 
quently to  apply.  But  that  demand  is  temporary, 
growing  out  of  the  existing  state  of  war.  Whenever 
peace  is  restored  to  it,  —  and  I  now  hope  that  the  day  is 
not  distant  when  its  independence  will  be  generally  ac- 
knowledged, —  there  cannot  be  a  doubt  that  it  will  sup- 
ply its  own  consumption.  In  all  parts  of  it,  the  soil, 
either  from  climate  or  from  elevation,  is  well  adapted 
to  the  culture  of  wheat ;  and  nowhere  can  better  wheat 
be  produced  than  in  some  portions  of  Mexico  and  Chili. 
Still  the  market  of  South  America  is  one  which,  on 
other  accounts,  deserves  the  greatest  consideration. 
And  I  congratulate  you,  the  committee,  and  the  coun- 
try on  the  recent  adoption  of  a  more  auspicious  policy 
towards  it. 

We  exported,  in  1803,  Indian  corn  to  the  amount  of 
2,074,608  bushels.  The  quantity  should  have  been,  in 
1823,  3,734,288  bushels.  The  actual  quantity  exported 
was  749,034  bushels,  or  about  one  fifth  of  what  it  should 
have  been,  and  a  little  more  than  one  third  of  what  it 
was  more  than  twenty  years  ago.  We  ought  not,  then, 
to  be  surprised  at  the  extreme  depression  of  the  price 
of  that  article,  of  which  I  have  heard  my  honorable 


SPEECH  OF  1824.  263 

friend  (Mr.  Bassett)  complain,  nor  of  the  distress  of  tlie 
corn-growing  districts  adjacent  to  the  Chesapeake  Bay. 
We  exported  77,934  barrels  of  beef  in  1803,  and  last 
year  but  61,418,  instead  of  140,274  barrels.  In  the 
same  year  (1803)  we  exported  96,602  barrels  of  pork, 
and  last  year  55,529,  instead  of  173,882  barrels.  Rice 
has  not  advanced,  by  any  means,  in  the  proportion 
which  it  ought  to  have  done.  All  the  small  articles, 
such  as  cheese,  butter,  candles,  and  so  forth,  too  minute 
to  detail,  but  important  in  their  aggregate,  have  also 
materially  diminished.  Cotton  alone  has  advanced. 
But  whilst  the  quantity  of  it  is  augmented,  its  actual 
value  is  considerably  diminished.  The  total  quantity 
last  year  exceeded  that  of  the  preceding  year  by  nearly 
30,000,000  pounds.  And  yet  the  total  value  of  the  year 
of  smaller  exportation  exceeded  that  of  the  last  year 
by  upwards  of  $3,500,000.  If  this  article,  the  capacity 
of  our  country  to  produce  which  was  scarcely  known  in 
1790,  were  subtracted  from  the  mass  of  our  exports, 
the  value  of  the  residue  would  only  be  a  little  upwards 
of  $27,000,000  during  the  last  year.  The  distribution 
of  the  articles  of  our  exports  throughout  the  United 
States  cannot  fail  to  fix  the  attention  of  the  Committee. 
Of  the  $47,155,408  to  which  they  amounted  last  year, 
three  articles  alone  (cotton,  rice,  and  tobacco)  composed 
together  $28,549,177.  ISTow  these  articles  are  chiefly 
produced  in  the  South.  And  if  we  estimate  that  por- 
tion of  our  population  who  are  actually  engaged  in  their 
culture,  it  would  probably  not  exceed  2,000,000.  Thus, 
then,  less  than  one  fifth  of  the  whole  population  of  the 
United  States  produced  upwards  of  one  half  —  nearly 
two  thirds  —  of  the  entire  value  of  the  exports  of  the 
last  year. 

Is  this  foreign  market,  so  incompetent  at  present,  and 
which,  limited  as  its  demands  are,  o])erates  so  unequally 
upon  the  productive  labor  of  our  country,  likely  to  im- 


264  HENRY  CLAY. 

prove  in  future  ?  If  I  am  correct  in  the  views  which  I 
have  presented  to  the  Committee,  it  must  become  Avorse 
and  worse.  What  can  im])rove  it  ?  Europe  will  not 
abandon  her  own  agriculture  to  foster  ours.  We  may 
even  anticipate  that  she  will  more  and  more  enter  into 
competition  with  us  in  the  supply  of  the  West  India 
market.  That  of  South  America,  for  articles  of  subsist- 
ence, will  probably  soon  vanish.  The  value  of  our  ex- 
ports for  the  future  may  remain  at  about  what  it  was 
last  year.  But  if  we  do  not  create  some  new  market, 
if  we  persevere  in  the  existing  pursuits  of  agriculture, 
the  inevitable  consequence  must  be,  to  augment  greatly 
the  quantity  of  our  produce,  and  to  lessen  its  value  in 
the  foreign  market.  Can  there  be  a  doubt  on  this  point  ? 
Take  the  article  of  cotton,  for  example,  which  is  almost 
the  only  article  that  now  remunerates  labor  and  capital. 
A  certain  description  of  labor  is  powerfully  attracted 
towards  the  cotton-growing  country.  The  cultivation 
will  be  greatly  extended,  the  aggregate  amount  annu- 
ally produced  will  be  vastly  augmented.  The  price  will 
fall.  The  more  unfavorable  soils  will  then  be  gradually 
abandoned.  And  I  have  no  doubt  that,  in  a  few  years, 
it  will  cease  to  be  profitably  produced,  anywhere  north 
of  the  thirty -fourth  degree  of  latitude.  But  in  the  mean 
time,  large  numbers  of  the  cotton-growers  will  suffer  the 
greatest  distress.  And  Avhilst  this  distress  is  brought 
upon  our  own  country,  foreign  industry  will  be  stimu- 
lated by  the  very  cause  which  occasions  our  distress. 
For,  by  surcharging  the  markets  abroad,  the  price  of 
the  raw  material  being  reduced,  the  manufacturer  will 
be  able  to  supply  cotton  fabrics  cheaper ;  and  the  con- 
sumption in  his  own  country,  and  in  foreign  nations 
other  than  ours  (where  the  value  of  the  import  must  be 
limited  to  the  value  of  the  export,  which  I  have  sup- 
posed to  remain  the  same)  being  proportionally  extended, 
there  will  be  consequently  an  increased  demand  for  the 
produce  of  his  industry. 


SPEECH  OF  1824.  265 

Our  agriciiltural  is  our  greatest  interest.  It  ought 
ever  to  be  predominant.  All  others  should  bend  to  it. 
And,  in  considering  what  is  for  its  advantage,  we  should 
contemplate  it  in  all  its  varieties,  of  planting,  farming, 
and  grazing.  Can  we  do  nothing  to  invigorate  it ;  no- 
thing to  correct  the  errors  of  the  past,  and  to  brighten 
the  still  more  unpromising  prospects  which  lie  before 
us  ?  We  have  seen,  I  think,  the  causes  of  the  distresses 
of  the  country.  We  have  seen  that  an  exclusive  de- 
pendence upon  the  foreign  market  must  lead  to  still 
severer  distress,  to  impoverishment,  to  ruin.  We  must 
then  change  somewhat  our  course.  We  must  give  a 
new  direction  to  some  portion  of  our  industry.  We 
must  speedily  adopt  a  genuine  American  policy.  Still 
cherishing  the  foreign  market,  let  us  create  also  a  home 
market,  to  give  further  scope  to  the  consumption  of  the 
produce  of  American  industry.  Let  us  counteract  the 
policy  of  foreigners,  and  withdraw  the  support  which 
we  now  give  to  their  industry,  and  stimulate  that  of  our 
own  country.  It  should  be  a  prominent  object  with 
wise  legislators  to  multiply  the  vocations  and  extend 
the  business  of  society,  as  far  as  it  can  be  done,  by 
the  protection  of  our  interests  at  home  against  the  in- 
jurious effects  of  foreign  legislation.  Suppose  we  were 
a  nation  of  fishermen,  or  of  skippers,  to  the  exclusion 
of  every  other  occu})ation,  and  the  legislature  had  the 
power  to  introduce  the  pursuits  of  agriculture  and 
manufactures,  would  not  our  happiness  be  promoted  l)y 
an  exertion  of  its  authority  ?  All  the  existing  employ- 
ments of  society  —  the  learned  professions,  commerce, 
agriculture  —  are  now  overflowing.  We  stand  in  each 
other's  way.  Hence  the  want  of  employment.  Hence 
the  eager  pursuit  after  public  stations,  which  I  have 
before  glanced  at.  I  have  been  again  and  again  shocked 
during  this  session  by  instances  of  solicitation  for  places 
before  the  vacancies  existed.     The  pulse  of  incumbents 


2G6  HENRY  CLAY. 

who  happen  to  be  taken  ill  is  not  marked  with  more 
anxiety  by  the  attending  physicians  than  by  those  Avho 
desire  to  succeed  them,  though  with  veiy  opposite  feel- 
ings. Our  old  friend,  the  faithful  sentinel,  —  who  has 
stood  so  long  at  our  door,  and  the  gallantry  of  whose 
patriotism  deserves  to  be  noticed  because  it  was  dis- 
played when  that  virtue  was  most  rare  and  most 
wanted,  on  a  memorable  occasion  in  this  unfortunate 
city, — became  indisposed  some  weeks  ago.  The  first 
intelligence  which  I  had  of  his  dangerous  illness  was  by 
an  application  for  his  unvacated  place.  I  hastened  to 
assure  myself  of  the  extent  of  his  danger,  and  was 
happy  to  find  that  the  eagerness  of  succession  out- 
stripped the  progress  of  disease.  By  creating  a  new 
and  extensive  business,  then,  we  should  not  only  give 
employment  to  those  who  want  it,  and  augment  the  sum 
of  national  wealth  by  all  that  this  new  business  would 
create,  but  we  should  meliorate  the  condition  of  those 
who  are  now  engaged  in  existing  employments.  In 
Europe,  particularly  in  Great  Britain,  their  large  standing 
armies,  large  navies,  large  even  on  their  peace  arrange- 
ment, their  established  church,  afford  to  their  popula- 
tion employments,  which,  in  that  respect,  the  hajipier 
constitution  of  our  government  does  not  tolerate  but 
in  a  very  limited  degree.  The  peace  establishments  of 
our  army  and  our  navy  are  extremely  small,  and  I  hope 
ever  will  be.  We  have  no  established  church,  and  I 
trust  never  shall  have.  In  proportion  as  the  enterprise 
of  our  citizens  in  public  employments  is  circumscribed, 
should  we  excite  and  invigorate  it  in  private  pursuits. 

The  creation  of  a  home  market  is  not  only  necessary 
to  procure  for  our  agriculture  a  just  reward  of  its  labors, 
but  it  is  indispensable  to  obtain  a  supply  of  our  neces- 
sary wants.  If  we  cannot  sell,  we  cannot  buy.  That 
portion  of  our  population  (and  we  have  seen  that  it  is 
not  less  than  four  fifths)  which  makes  comparatively 


SPEECH  OF  1824.  267 

notliing  that  foreigners  will  buy,  has  nothing  to  make 
purchases  with  from  foreigners.  It  is  in  vain  that  we 
are  told  of  the  amount  of  our  exports  supplied  by  the 
planting  interest.  They  may  enable  the  planting  in- 
terest to  supply  all  its  wants  ;  but  they  bring  no  ability 
to  the  interests  not  planting ;  unless,  which  cannot  be 
pretended,  the  planting  interest  was  an  adequate  vent 
for  the  surplus  produce  of  the  labor  of  all  other  inter- 
ests. It  is  in  vain  to  tantalize  vis  with  the  greater 
cheapness  of  foreign  fabrics.  There  must  be  an  ability 
to  purchase,  if  an  article  be  obtained,  whatever  may  be 
the  price,  high  or  low,  at  which  it  is  sold.  And  a  cheap 
article  is  as  much  beyond  the  grasp  of  him  who  has  no 
means  to  buy,  as  a  high  one.  Even  if  it  were  true  that 
the  American  manufacturer  would  supply  consumption 
at  dearer  rates,  it  is  better  to  have  his  fabrics  than  the 
unattainable  foreign  fabrics  ;  because  it  is  better  to  be 
ill  supplied  than  not  supplied  at  all.  A  coarse  coat, 
which  will  communicate  warmth  and  cover  nakedness, 
is  better  than  no  coat.  The  superiority  of  the  home 
market  results,  first,  from  its  steadiness  and  compara- 
tive certainty  at  all  times ;  secondly,  from  the  creation 
of  reciprocal  interest ;  thirdly,  from  its  greater  security ; 
and,  lastly,  from  an  ultimate  and  not  distant  augmen- 
tation of  consumption  (and  consequently  of  comfort) 
from  increased  quantity  and  reduced  prices.  But  this 
home  market,  highly  desirable  as  it  is,  can  only  be  cre- 
ated and  cherished  by  the  protection  of  our  own  legisla- 
tion against  the  inevitable  prostration  of  our  industry 
which  must  ensue  from  the  action  of  foreign  policy  and 
legislation.  The  effect  and  the  value  of  this  domestic 
care  of  our  own  interests  will  be  obvious  from  a  few 
facts  and  considerations.  Let  us  suppose  that  half  a 
million  of  persons  are  now  employed  abroad  in  fabricat- 
ing for  our  consumption  those  articles  of  which,  l)y  the 
operation  of  this  bill,  a  supply  is  intended  to  be  pro- 


208  HENRY  CLAY. 

vidcd  Avitliiii  ourselves.  That  half  a  million  of  persons 
are,  in  effect,  subsisted  by  us  ;  but  their  actual  means  of 
subsistence  are  drawn  from  foreign  agriculture.  If  we 
could  transport  them  to  this  country,  and  incorporate 
them  in  the  mass  of  our  own  population,  there  would 
instantly  arise  a  demand  for  an  amount  of  provisions 
equal  to  that  which  would  be  requisite  for  their  subsist- 
ence throughout  the  whole  year.  That  demand,  in  the 
article  of  Hour  alone,  would  not  be  less  than  the  quan- 
tity of  about  900,000  barrels,  besides  a  proportionate 
(piantity  of  beef  and  pork  and  other  articles  of  subsist- 
ence. But  900,000  barrels  of  flour  exceeded  the  entire 
quantity  exported  last  year  by  nearly  150,000  barrels. 
What  activity  would  not  this  give,  what  cheerfulness 
would  it  not  communicate  to  our  now  dispirited  farming 
interest !  But  if,  instead  of  these  five  hundred  thou- 
sand artisans  emigrating  from  abroad,  we  give  by  this 
bill  employment  to  an  equal  number  of  our  own  citizens 
now  engaged  in  unprofitable  agriculture,  or  idle  from 
the  Avant  of  business,  the  beneficial  effect  upon  the  pro- 
ductions of  our  farming  labor  would  be  nearly  doubled. 
The  quantity  would  be  diminished  by  a  subtraction  of 
the  produce  from  the  labor  of  all  those  who  should  be 
diverted  from  its  pursuits  to  manufacturing  industry^ 
and  the  value  of  the  residue  would  be  enhanced,  both  by 
that  diminution  and  the  creation  of  the  home  market, 
to  the  extent  supposed.  And  the  honorable  gentleman 
from  Virginia  may  repress  any  apprehensions  which  he 
entertains  that  the  plow  will  be  abandoned  and  our 
fields  remain  unsown.  For,  under  all  the  modifications 
of  social  industry,  if  you  will  secure  to  it  a  just  reward, 
the  greater  attractions  of  agriculture  will  give  to  it  that 
proud  superiority  which  it  has  always  maintained.  If 
we  suppose  no  actual  abandonment  of  farming,  but, 
what  is  most  likely,  a  gradual  and  imperceptible  em- 
ployment of  population  in  the  business  of  manufactur- 


SPEECH  OF  1824.  269 

ing,  instead  of  being  compelled  to  resort  to  agriculture, 
the  salutary  effect  would  be  nearly  the  same.  Is  any 
part  of  our  common  country  likely  to  be  injiired  by  a 
transfer  of  the  theatre  of  fabrication  for  our  own  con- 
sumption from  Europe  to  America?  All  that  those 
parts,  if  any  there  be,  which  will  not,  nor  cannot  engage 
in  manufactures,  should  require,  is,  that  their  consump- 
tion should  be  well  supplied ;  and  if  the  objects  of  that 
consumption  are  produced  in  other  parts  of  the  Union 
that  can  manufacture,  far  from  having  on  that  account 
any  just  cause  of  complaint,  their  patriotism  will  and 
ought  to  inculcate  a  cheerful  acquiescence  in  what  es- 
sentially contributes,  and  is  indispensably  necessary,  to 
the  prosperity  of  the  common  family. 

The  great  desideratum  in  political  economy  is  the 
same  as  in  x'l'ivate  pursuits  ;  that  is,  what  is  the  best 
application  of  the  aggregate  industry  of  a  nation  that 
can  be  made  honestly  to  produce  the  largest  sum  of  na- 
tional wealth  ?  Labor  is  the  source  of  all  wealth  ;  but 
it  is  not  natural  labor  only.  And  the  fundamental  error 
of  the  gentleman  from  Virginia,  and  of  the  school  to 
which  he  belongs,  in  deducing  from  our  sparse  popula- 
tion, our  unfitness  for  the  introduction  of  the  arts,  con- 
sists in  their  not  sufficiently  weighing  the  importance 
of  the  power  of  machinery.  In  former  times,  when  but 
little  comparative  use  was  made  of  machinery,  manual 
labor  and  the  price  of  wages  were  circumstances  of  the 
greatest  consideration.  J'.ut  it  is  far  otherwise  in  these 
latter  times.  Such  are  the  improvements  and  the  per- 
fection of  machinery,  that,  in  analyzing  the  com])ound 
value  of  many  fabrics,  the  element  of  natural  labor  is 
so  inconsiderable  as  almost  to  escape  detection.  This 
truth  is  demonstrated  by  many  facts.  Formerly  Asia, 
in  consequence  of  the  density  of  her  population,  and  the 
consequent  lowness  of  wages,  laid  Europe  under  tribute 
for  many  of  her  fabrics.     Now  Europe  reacts  ui)on  Asia, 


270  HENRY  CLAY. 

and  Great  Britain,  in  particvilar,  throws  back  upon  her 
countless  millions  of  people  the  rich  treasures  produced 
by  artificial  labor,  to  a  vast  amount,  infinitely  cheaper 
than  they  can  be  manufactured  by  the  natural  exertions 
of  that  portion  of  the  globe.     But  Britain  is  herself  the 
most  striking  illustration  of  the  immense  power  of  ma- 
chinery.    Upon  what  other  principle  can  you  account 
for  the  enormous  wealth  which   she  has  accumulated, 
and  which  she  annually  produces  ?     A  statistical  writer 
of  that  country,  several  years  ago,  estimated  the  total 
amount  of  the  artificial  or  machine  labor  of  the  nation 
to  be  equal  to  that  of  100,000,000  of  able-bodied  laborers. 
Subsequent  estimates  of  her  artificial  labor  at  the  present 
day  carry  it  to  the   enormous  height  of   200,000,000. 
But  the  population  of  the  three  kingdoms  is  21,500,000. 
Supposing   that   to   furnish    able-bodied    labor   to   the 
amount  of  4,000,000,  the  natural  labor  will  be  but  two 
per  cent  of  the  artificial  labor.     In  the  production  of 
wealth  she  operates,  therefore,  by  a  power  (including  the 
whole  population)  of  221,500,000 ;  or,  in  other  words,  by 
a  power  eleven  times  greater  than  the  total  of  her  natural 
power.     If  we  suppose  the  machine  labor  of  the  United 
States  to  be  equal  to  that  of    10,000,000   able-bodied 
men,  the  United  States  will  operate,  in  the  creation  of 
wealth,  by  a  power  (including  all  their  population)  of 
20,000,000.     In  the  creation  of  wealth,  therefore,   the 
power  of  Great  Britain  compared  to  that  of  the  United 
States  is  as  eleven  to  one.     That  these  views  are  not 
imaginary,  will  be,  I  think,  evinced  by  contrasting  the 
wealth,  the  revenue,   the  power  of  the  two  countries. 
Upon  what  other  hypothesis  can  we  explain  those  al- 
most incredible  exertions  which  Britain  made  during 
the  late  wars  of  Europe  ?     Look  at  lier  immense  sub- 
sidies !     I>ehold  her  standing  unaided  and  alone,   and 
breasting  the  storm  of  ]Sra|)o]eon's  eolossnl  power,  when 
all  continental  Europe  owned  and  yielded  to  its  irresisti- 


SPEECH  OF  1824.  271 

ble  sway  ;  and  finally,  contemplate  her  vigorous  prosecn- 
tion  of  the  war,  with  and  without  allies,  to  its  splendid 
termination  on  the  ever-memorable  field  of  Waterloo ! 
The  British  works  which  the  gentleman  from  Virginia 
has  quoted  portray  a  state  of  the  most  wonderful  pros- 
])erity  in  regard  to  wealth  and  resources  that  ever  was 
before  contemplated.  Let  us  look  a  little  into  the  semi- 
ofiicial  pamphlet,  written  with  great  force,  clearness, 
and  ability,  and  the  valuable  work  of  Lowe,  to  both  of 
which  that  gentleman  has  referred.  The  revenue  of  the 
United  Kingdom  amounted,  during  the  latter  years  of 
the  war,  to  £70,000,000  sterling;  and  one  year  it  rose 
to  the  astonishing  height  of  £90,000,000  sterling,  equal 
to  $400,000,000.  This  was  actual  revenue,  made  up  of 
real  contributions  from  the  purses  of  the  people.  After 
the  close  of  the  war,  ministers  slowly  and  reluctantly 
reduced  the  military  and  naval  establishments,  and  ac- 
commodated them  to  a  state  of  peace.  The  pride  of 
power,  everywhere  the  same,  always  unwillingly  sur- 
renders any  of  those  circumstances  which  display  its 
pomp  and  exhibit  its  greatness.  Contemporaneous  with 
this  reduction,  Britain  was  enabled  to  lighten  some  of 
the  heaviest  burdens  of  taxation,  and  particularly  that 
most  onerous  of  all,  the  income  tax.  In  this  lowered 
state,  the  revenue  of  peace,  gradually  rising  from  tlie 
momentary  dej)ression  incident  to  a  transition  from 
war,  attained  in  1822  the  vast  amount  of  £55,000,000 
sterling,  upwards  of  .f! 240,000,000,  and  more  than  eleven 
times  that  of  the  United  States  for  the  same  year ; 
thus  indicating  the  difference  which  I  have  suggested 
in  the  respective  productive  powers  of  the  two  coun- 
tries. The  excise  alone  (collected  under  twenty-five 
different  heads)  amounted  to  £28,000,000,  more  than 
one  half  of  the  total  revenue  of  the  kinc:dom.  This 
great  revenue  allows  Great  Britain  to  constitute  an 
efficient    sinking   fund   of    £5,000,000   sterling,    l^'ing 


272  HEN  BY  CLAY. 

an  excess  of  acti;al  income  beyond  expenditure,  and 
amounting  to  more  than  the  entire  revenue  of  the 
United  States. 

If  we  look  at  the  commerce  of  England,  we  shall  per- 
ceive that  its  prosperous  condition  no  less  denotes  the 
immensity  of  her  riches.  The  average  of  three  years' 
exports,  ending  in  1789,  was  between  thirteen  and  four- 
teen millions.  The  average  for  the  same  term,  ending 
in  1822,  was  £40,000,000.  The  average  of  the  imports 
for  three  years,  ending  in  1789,  was  £17,000,000.  The 
average  for  the  same  term,  ending  in  1822,  was  £36,- 
000,000,  showing  a  favorable  balance  of  £4,000,000. 
Thus,  in  a  period  not  longer  than  that  which  has 
elapsed  since  the  establishment  of  our  constitution, 
have  the  exports  of  that  kingdom  been  tripled;  and 
this  has  mainly  been  the  effect  of  the  power  of  ma- 
chinery. The  total  amount  of  the  commerce  of  Great 
Britain  is  greater  since  the  peace,  by  one  fourth,  than 
it  was  during  the  war.  The  average  of  her  tonnage, 
during  the  most  flourishing  period  of  the  war,  was 
2,400,000  tons.  Its  average,  during  the  three  years, 
1819,  1820,  and  1821,  was  2,600,000 ;  exhibiting  an  in- 
crease of  200,000  tons.  If  we  glance  at  some  of  the 
more  prominent  articles  of  her  manufactures,  we  shall 
be  assisted  in  comprehending  the  true  nature  of  the 
sources  of  her  riches.  The  amount  of  cotton  fabrics 
exported,  in  the  most  prosperous  year  of  the  war,  was 
£18,000,000.  In  the  year  1820,  it  was  £16,600,000  ;  in 
1821,  £20,500,000 ;  in  1822,  £21,639,000  ;  presenting  the 
astonishing  increase  in  two  years  of  upwards  of  £5,000,- 
000.  The  total  amount  of  imports  in  Great  Britain, 
from  all  foreign  parts,  of  the  article  of  cotton  wool,  is 
£5,000,000.  After  supplying  most  abundantly  the  con- 
sumption of  cotton  fabrics  within  the  country  (and  a 
people  better  fed  and  clad  and  housed  are  not  to  be 
found  under  the  sun  than  the  British  nation)  by  means 


SPEECH  OF  1824.  273 

of  her  industry,  she  gives  to  this  cotton  wool  a  neAV 
value,  which  enables  her  to  sell  to  foreign  nations  to 
the  amount  of  £21,639,000,  making  a  clear  profit  of 
upwards  of  £16,500,000!  In  1821,  the  value  of  the 
export  of  woollen  manufactures  was  £4,300,000.  In 
1822  it  was  £5,500,000.  The  success  of  her  restric- 
tive policy  is  strikingly  illustrated  in  the  article  of  silk. 
In  the  manufacture  of  that  article  she  labors  under 
great  disadvantages,  besides  that  of  not  producing  the 
raw  material.  She  has  subdued  them  all,  and  the  in- 
crease of  the  manufacture  has  been  most  rapid.  Al- 
though she  is  still  unable  to  maintain,  in  foreign  coun- 
tries, a  successful  competition  with  the  silks  of  France, 
of  India,  and  of  Italy,  and  therefore  exports  but  little, 
she  gives  to  the  £2,000,000  of  the  raw  material  which 
she  imports,  in  various  forms,  a  value  of  £10,000,000, 
which  chiefly  enter  into  British  consumption.  Let  us 
suppose  that  she  was  dependent  upon  foreign  nations 
for  these  £10,000,000,  what  an  injurious  effect  would  it 
not  have  upon  her  commercial  relations  with  them  ? 
The  average  of  the  exports  of  British  manufactures, 
during  the  peace,  exceeds  the  average  of  the  most  pro- 
ductive years  of  the  war.  The  amount  of  her  Avealth 
annually  produced  is  £350,000,000,  bearing  a  large 
proportion  to  all  of  her  preexisting  wealth.  The  agri- 
cultural portion  of  it  is  said,  by  the  gentleman  from 
Virginia,  to  be  greater  than  that  created  by  any  other 
branch  of  her  industry.  But  that  flows  mainly  from 
a  policy  similar  to  that  proposed  by  this  bill.  One 
third  only  of  her  population  is  engaged  in  agriculture, 
the  other  two  thirds  furnishing  a  market  for  the  pro- 
duce of  that  third.  Withdraw  this  market,  and  what 
becomes  of  her  agriculture  ?  The  power  and  the  wealth 
of  Great  Britain  cannot  be  more  strikingly  illustrated 
than  by  a  comparison  of  her  population  and  revenue 
with  those  of  other  countries  and  with  our  own.    [Here 


274  HENRY  CLAY. 

]\Tr.  Clay  exliiLited  the  following  table,  made  out  from 
authentic  materials.] 

Population.  Taxes  and  Taxation 

public  burdens.       per  capita. 

Russia  in  Europe 37,000,000     £18,000,000      £0    9     9 

France,  including  Corsica   .   •.     80,700,000        37,000,000         1     4     0 
Great   Britain,  exclusive  of  \ 
Ireland    (the   taxes   com- 
puted   according    to    the  [     14,500,000       40,000,000        2  15    0 
value    of    money   on    the   I 
European  continent)     .     .  J 
Great  Britain  and  Ireland  col- 
lectively     21,500,000       44,000,000        2    0    0 

England  alone 11,600,000      .30,000,000         3     2     0 

Spain 11,000,000         0,000,000        0  11     0 

Ireland 7,000,000  4,000,000         0  11     0 

The  United  States  of  America     10,000,000  4,.500,000         0     9     0 

From  this  exhibit  we  must  remark,  that  the  wealth  of 
Great  Britain,  and  consequently  her  power,  is  greater 
than  that  of  any  of  the  other  nations  with  which  it  is 
com})ared.  The  amount  of  the  contributions  which  she 
draws  from  the  pockets  of  her  subjects  is  not  referred 
to  for  imitation,  but  as  indicative  of  their  wealth. 
The  burden  of  taxation  is  always  relative  to  the  ability 
of  the  subjects  of  it.  A  poor  nation  can  pay  but  little. 
And  the  heavier  taxes  of  British  subjects,  for  example, 
in  consequence  of  their  greater  wealth,  may  be  more 
easily  borne  than  the  much  lighter  taxes  of  Spanish 
subjects,  in  consequence  of  their  extreme  poverty.  The 
object  of  wise  governments  should  be,  by  sound  legisla- 
tion, so  to  protect  the  industry  of  their  own  citizens 
against  the  policy  of  foreign  powers,  as  to  give  to  it 
the  most  expansive  force  in  the  production  of  wealth. 
Great  Britain  has  ever  acted,  and  still  acts,  on  this 
policy.  She  has  pushed  her  protection  of  British  in- 
terest further  than  any  other  nation  has  fostered  its 
industry.  The  result  is,  greater  wealth  among  her  sub- 
jects, and  consequently  greater  ability  to  pay  their 
public  burdens.     If  their  taxation  is  estimated  by  their 


SPEECH  OF  1824.  275 

natural  labor  alone,  nominally  it  is  greater  than  the 
taxation  of  the  subjects  of  any  other  power ;  but  if 
on  a  scale  of  their  national  and  artificial  labor  com- 
pounded, it  is  less  than  the  taxation  of  any  other 
peojile.  Estimating  it  on  that  scale,  and  assuming  the 
aggregate  of  the  natural  and  artificial  labor  of  the 
United  Kingdom  to  be  what  I  have  already  stated,  221,- 
500,000,  the  actual  taxes  paid  by  a  British  subject  are 
only  about  three  and  seven-pence  sterling.  Estimating 
our  OAvn  taxes  on  a  similar  scale,  —  that  is,  supposing 
both  descriptions  of  labor  to  be  equal  to  that  of  twenty 
millions  of  able-bodied  persons,  —  the  amount  of  tax 
paid  by  each  soul  in  the  United  States  is  four  shillings 
and  six-pence  sterling. 

The  committee  will  observe,  from  that  table,  that  the 
measure  of  the  wealth  of  a  nation  is  indicated  by  the 
measure  of  its  protection  of  its  industry ;  and  that 
the  measure  of  the  poverty  of  a  nation  is  marked  by 
that  of  the  degree  in  which  it  neglects  and  abandons 
the  care  of  its  own  industry,  leaving  it  exposed  to  the 
action  of  foreign  powers.  Great  Britain  protects  most 
her  industry,  and  the  wealth  of  Great  Britain  is  con- 
sequently the  greatest.  France  is  next  in  the  degree 
of  protection,  and  France  is  next  in  the  order  of  wealth. 
Spain  most  neglects  the  duty  of  protecting  the  indus- 
try of  her  subjects,  and  Spain  is  one  of  the  poorest  of 
European  nations.  Unfortunate  Ireland,  disinherited 
or  rendered  in  her  indus-try  subservient  to  England,  is 
exactly  in  the  same  state  of  poverty  with  Spain,  mea- 
sured by  the  rule  of  taxation.  And  the  United  States 
are  still  poorer  than  either. 

The  views  of  British  prosperity,  which  I  have  en- 
deavored to  present,  show  that  her  protecting  policy  is 
adapted  alike  to  a  state  of  war  and  of  peace.  Self- 
poised,  resting  upon  her  own  internal  resources,  possess- 
ing a  home   market  carefully  cherished  and   guarded, 


276  JIJiNEY  CLAY. 

she  is  ever  prepared  for  any  emergency.  We  have  seen 
her  coming  out  of  a  war  of  incalculable  exertion,  and 
of  great  duration,  with  her  power  unbroken,  her  means 
undiminished.  We  have  seen  that  almost  every  re- 
volving year  of  peace  has  brought  along  with  it  an 
increase  of  her  manufactures,  of  her  commerce,  and, 
consequently,  of  her  navigation.  We  have  seen  that, 
constructing  her  prosperity  upon  the  solid  foundation 
of  her  own  protecting  policy,  it  is  unaffected  by  the 
vicissitudes  of  other  states.  What  is  our  own  condi- 
tion ?  Depending  upon  the  state  of  foreign  powers,  con- 
fiding exclusively  in  a  foreign,  to  the  culpable  neglect  of 
a  domestic  policy,  our  interests  are  affected  by  all  their 
movements.  Their  wars,  their  misfortunes,  are  the  only 
source  of  our  prosperity.  In  their  peace,  and  our  peace, 
Ave  behold  our  condition  the  reverse  of  that  of  Great 
Britain,  and  all  our  interests  stationary  or  declining. 
Peace  brings  to  us  none  of  the  blessings  of  peace.  Our 
system  is  anomalous ;  alike  unfitted  to  general  tran- 
quillity, and  to  a  state  of  war  or  peace  on  the  part  of 
our  own  country.  It  can  succeed  only  in  the  rare  occur- 
rence of  a  general  state  of  war  throughout  Europe.  I 
am  no  eulogist  of  England.  I  am  far  from  recommend- 
ing her  systems  of  taxation.  I  have  adverted  to  them 
only  as  manifesting  her  extraordinary  ability.  The 
political  and  foreign  interests  of  that  nation  may  have 
been,  as  I  believe  them  to  have  been,  often  badly  man- 
aged. Had  she  abstained  from  the  Avars  into  Avhich  she 
has  been  plunged  by  her  ambition,  or  the  mistaken  pol- 
icy of  her  ministers,  the  prosperity  of  England  Avould, 
unquestionably,  have  been  much  greater.  But  it  may 
happen  that  the  public  liberty,  and  the  foreign  relations 
of  a  nation,  have  been  badly  provided  for,  and  yet  that 
its  political  economy  has  been  Avisely  managed.  The 
alacrity  or  sullenness  Avith  Avhich  a  people  pay  taxes 
depends  upon  their  Avealth  or  poverty.     If  the  system 


SPEECH  OF  1824.  211 

of  their  rulers  leads  to  their  impoverishment,  they  can 
contribute  but  little  to  the  necessities  of  the  state  ;  if 
to  their  wealth,  they  cheerfully  and  promptly  pay  the 
burdens  imposed  on  them.  Enormous  as  British  taxa- 
tion appears  to  be  in  comparison  with  that  of  other 
nations,  but  really  lighter  as  it  in  fact  is  when  we  con- 
sider its  great  wealth  and  its  powers  of  production,  that 
vast  amount  is  collected  with  the  most  astonishing  reg- 
ularity. [Here  Mr.  Clay  read  certain  passages  from 
Holt,  showing  that,  in  1822,  there  was  not  a  solitary 
prosecution  arising  out  of  the  collection  of  the  assessed 
taxes,  which  are  there  considered  among  the  most  bur- 
densome, and  that  the  prosecution  for  violations  of  the 
excise  laws,  in  all  its  numerous  branches,  were  sensi- 
bly and  progressively  decreasing.] 

Having  called  the  attention  of  the  committee  to  the 
present  adverse  state  of  our  country,  and  endeavored 
to  point  out  the  causes  which  have  led  to  it ;  having 
shown  that  similar  causes,  wherever  they  exist  in  other 
countries,  lead  to  the  same  adversity  in  their  condi- 
tion ;  and  having  shown  that,  wherever  we  find  opposite 
canses  prevailing,  a  high  and  animating  state  of  national 
prosperity  exists,  the  committee  will  agree  with  me  in 
thinking  that  it  is  the  solemn  duty  of  government  to 
apply  a  remedy  to  the  evils  which  afflict  our  country, 
if  it  can  apply  one.  Is  there  no  remedy  within  the 
reach  of  the  government  ?  Are  we  doomed  to  behold 
our  industry  languish  and  decay,  yet  more  and  more  ? 
But  there  is  a  remedy,  and  that  remedy  consists  in 
modifying  our  foreign  policy,  and  in  adopting  a  genuine 
American  system.  We  must  naturalize  the  arts  in  our 
country  ;  and  we  must  naturalize  them  by  the  only 
means  which  the  wisdom  of  nations  has  yet  discovered 
to  be  effectual,  —  by  adequate  protection  against  the 
otherwise  overwhelming  influence  of  foreigners.  This 
is  only  to  be  accomplished  by  the  establishment  of  a 
tariff,  to  the  consideration  of  which  I  am  now  brought. 


278  HENRY  CLAY. 

And  what  is  this  tariff  ?  It  seems  to  have  been  re- 
garded as  a  sort  of  monster,  huge  and  deformed,  —  a 
Avikl  beast,  endowed  with  tremendous  powers  of  de- 
struction, about  to  be  let  loose  among  our  people,  if  not 
to  devour  them,  at  least  to  consume  their  substance. 
But  let  us  calm  our  passions,  and  deliberately  survey 
this  alarming,  this  terrific  being.  The  sole  object  of 
the  tariff  is  to  tax  the  produce  of  foreign  industry,  with 
the  view  of  promoting  American  industry.  The  tax  is 
exclusively  leveled  at  foreign  industry.  That  is  tiie 
avowed  and  the  direct  purpose  of  the  tariff.  If  it  sub- 
jects any  part  of  American  industry  to  burdens,  that  is 
an  effect  not  intended,  but  is  altogether  incidental,  and 
perfectly  voluntary. 

It  has  been  treated  as  an  imposition  of  burdens  upon 
one  part  of  the  community  by  design,  for  the  benefit 
of  another ;  as  if,  in  fact,  money  were  taken  from  the 
pockets  of  one  portion  of  the  people  and  put  into  the 
pockets  of  another.  But  is  that  a  fair  representation 
of  it  ?  No  man  pays  the  duty  assessed  on  the  foreign 
article  by  compulsion,  but  voluntarily  ;  and  this  volun- 
tary duty,  if  paid,  goes  into  the  common  exchequer,  for 
the  common  benefit  of  all.  Consumption  has  four  ob- 
jects of  choice.  First,  it  may  abstain  from  the  use  of 
the  foreign  article,  and  thus  avoid  the  payment  of  the 
tax.  Second,  it  may  employ  the  rival  American  fabric. 
Third,  it  may  engage  in  the  business  of  manufacturing, 
which  this  bill  is  designed  to  foster.  Fourth,  or  it  may 
supply  itself  from  the  household  manufactures.  But  it 
is  said,  by  the  honorable  gentleman  from  Virginia,  that 
the  South,  owing  to  the  character  of  a  certain  portion  of 
its  population,  cannot  engage  in  the  business  of  manu- 
facturing. Now,  I  do  not  agree  in  that  opinion,  to  the 
extent  in  which  it  is  asserted.  The  circumstance  al- 
luded to  may  disqualify  the  South  from  engaging  in 
every  branch  of  manufacture,  as  largely  as  other  quar- 


SPEECH  OF  1824.  279 

ters  of  the  Union,  but  to  some  branches  of  it  that  part 
of  our  population  is  well  adapted.  It  indisputably 
affords  great  facility  in  the  household  or  domestic  line. 
But,  if  the  gentleman's  premises  were  true,  could  his 
conclusion  be  admitted  ?  According  to  him,  a  certain 
part  of  our  population,  happily  much  the  smallest,  is 
peculiarly  situated.  The  circumstance  of  its  degradation 
unfits  it  for  the  manufacturing  arts.  The  well-being  of 
the  other,  and  the  larger  part  of  our  population,  requires 
the  introduction  of  those  arts.  AVhat  is  to  be  done  in 
this  conflict  ?  The  gentleman  would  have  us  abstain 
from  adopting  a  policy  called  for  by  the  interest  of  the 
greater  and  freer  part  of  our  population.  But  is  that 
reasonable  ?  Can  it  be  expected  that  the  interests  of 
the  greater  part  should  be  made  to  bend  to  the  condi- 
tion of  the  servile  part  of  our  population  ?  That,  in 
effect,  would  be  to  make  us  the  slaves  of  slaves.  I 
went  with  great  pleasure  along  with  my  Southern 
friends,  and  I  am  ready  again  to  unite  with  them  in 
protesting  against  the  exercise  of  any  legislative  power, 
on  the  part  of  Congress,  over  that  delicate  subject, 
because  it  was  my  solemn  conviction  that  Congress  was 
interdicted,  or  at  least  not  authorized,  by  the  Constitu- 
tion, to  exercise  any  such  legislative  power.  And  I  am 
sure  that  the  patriotism  of  the  South  may  be  exclu- 
sively relied  upon  to  reject  a  policy  which  should  be 
dictated  by  considerations  altogether  connected  with 
that  degraded  class,  to  the  prejudice  of  the  residue  of 
our  population.  But  does  not  a  perseverance  in  the 
foreign  policy,  as  it  now  exists  in  fact,  make  all  parts 
of  the  Union,  not  planting,  tributary  to  the  planting 
parts  ?  What  is  the  argument  ?  It  is,  that  we  must 
continue  freely  to  receive  the  produce  of  foreign  in- 
dustry, without  regard  to  the  protection  of  American 
industry,  that  a  market  may  be  retained  for  the  sale 
abroad  of  the  produce  of  the  planting  portion  of  the 


280  HENRY  CLAY. 

country  ;  and  that,  if  we  lessen  in  all  parts  of  America 
—  those  Avhich  are  not  planting  as  well  as  the  planting 
sections  —  the  consumption  of  foreign  manufactures, 
we  diminish  to  that  extent  the  foreign  market  for  the 
planting  produce.  The  existing  state  of  things,  indeed, 
presents  a  sort  of  tacit  compact  between  the  cotton- 
grower  and  the  British  manufacturer,  the  stipulations 
of  which  are,  on  the  part  of  the  cotton-grower,  that  the 
whole  of  the  United  States,  the  other  portions  as  well 
as  the  cotton-growing,  shall  remain  open  and  unre- 
stricted in  the  consumption  of  British  manufactures  ; 
and,  on  the  part  of  the  British  manufacturer,  that,  in 
consideration  thereof,  he  will  continue  to  purchase  the 
cotton  of  the  South.  Thus,  then,  we  perceive  that  the 
proposed  measure,  instead  of  sacrificing  the  South  to 
the  other  parts  of  the  Union,  seeks  only  to  preserve  them 
from  being  absolutely  sacrificed  under  the  operation  of 
the  tacit  compact  which  I  have  described.  Supposing 
the  South  to  be  actually  incompetent,  or  disinclined,  to 
embark  at  all  in  the  business  of  manufacturing,  is  not 
its  interest,  nevertheless,  likely  to  be  promoted  by 
creating  a  new  and  an  American  source  of  supply  for 
its  consumption  ?  Now  foreign  powers,  and  Great 
Britain  principally,  have  the  monopoly  of  the  supply 
of  Southern  consumption.  If  this  bill  should  pass, 
an  American  competitor,  in  the  supply  of  the  South, 
would  be  raised  up,  and  ultimately  I  cannot  doubt  that 
it  will  be  supplied  more  cheaply  and  better.  I  have 
before  had  occasion  to  state,  and  will  now  again  men- 
tion, the  beneficial  effects  of  American  competition 
with  Europe,  in  furnishing  a  siipply  of  the  article  of 
cotton  bagging.  After  the  late  war,  the  influx  of  the 
Scottish  manufacture  prostrated  the  American  estab- 
lishments. The  consequence  was,  that  the  Scotch  pos- 
sessed the  monopoly  of  the  supply  ;  and  the  price  of  it 
rose,  and  attained,  the  year  before  the  last,  a  height 


SPEECH  OF  1824.  281 

which  amounted  to  more  than  an  equivalent  for  ten 
years'  protection  to  the  American  manufacture.  This 
circumstance  tempted  American  industry  again  to  en- 
gage in  the  business,  and  several  valuable  manufacto- 
ries have  been  established  in  Kentucky.  They  have 
reduced  the  price  of  the  fabric  very  considerably  ;  but, 
without  the  protection  of  government,  they  may  again 
be  prostrated,  and  then,  the  Scottish  manufacturer  en- 
grossing the  sup})ly  of  our  consumption,  the  price  will 
probably  again  rise.  It  has  been  tauntingly  asked  if 
Kentucky  cannot  maintain  herself  in  a  competition  with 
the  two  Scottish  towns  of  Inverness  and  Dundee  ?  But 
is  that  a  fair  statement  of  the  case  ?  Those  two  towns 
are  cherished  and  sustained  by  the  whole  protecting 
policy  of  the  British  empire,  whilst  Kentucky  cannot, 
and  the  general  government  will  not,  extend  a  like  pro- 
tection to  the  few  Kentucky  villages  in  which  the  arti- 
cle is  made. 

If  the  cotton-growing  consumption  could  be  consti- 
tutionally exempted  from  the  operation  of  this  bill,  it 
might  be  fair  to  exempt  it,  upon  the  condition  that  for- 
eign manufactures,  the  proceeds  of  the  sale  of  cotton 
abroad,  should  not  enter  at  all  into  the  consumption  of 
the  other  parts  of  the  United  States.  But  such  an 
arrangement  as  that,  if  it  could  be  made,  would  })roba- 
bly  be  objected  to  by  the  cotton-growing  country  itself. 

Second.  The  second  objection  to  the  proposed  bill  is 
that  it  will  diminish  the  amount  of  our  exports.  It 
can  have  no  effect  upon  our  exports,  except  those  which 
are  sent  to  Europe.  Except  tobacco  and  rice,  we  send 
there  nothing  but  the  raw  materials.  The  argument  is, 
that  Europe  will  not  buy  of  us  if  we  do  not  buy  of  her. 
The  first  objection  to  it  is  that  it  calls  upon  us  to  look 
to  the  question,  and  to  take  care  of  European  ability  in 
legislating  for  American  interests.  Now  if,  in  legislat- 
ing for  their  interests,  they  would  consider  and  provide 


282  HENRY  CLAY. 

for  our  ability,  the  principle  of  reciprocity  would  en- 
join us  so  to  regulate  our  intercourse  with  them  as  to 
leave  their  ability  unimpaired.  But  I  have  shown  that, 
in  the  adojition  of  their  own  policy,  their  iiupiiry  is 
strictly  limited  to  a  consideration  of  their  peculiar  in- 
terests, without  any  regard  to  that  of  ours.  The  next 
remark  I  would  make  is  that  the  bill  only  operates 
u})on  certain  articles  of  European  industry,  which  it  is 
supposed  our  interest  requires  us  to  manufacture  within 
ourselves ;  and  although  its  effect  will  be  to  diminish 
the  amount  of  our  imports  of  those  articles,  it  leaves 
them  free  to  supply  us  with  any  other  produce  of  their 
industry.  And  since  the  circle  of  human  comforts, 
retinements,  and  luxuries  is  of  great  extent,  Europe 
will  still  find  herself  able  to  purchase  from  us  what  she 
has  hitherto  done,  and  to  discharge  the  debt  in  some  of 
those  objects.  If  there  be  any  diminution  in  our  ex- 
l)orts  to  Europe,  it  will  probably  be  in  the  article  of 
cotton  to  Great  Britain.  I  have  stated  that  Britain 
buys  cotton  wool  to  the  amount  of  about  i^ 5,000,000, 
and  sells  to  foreign  states  to  the  amount  of  upwards 
of  £21,500,000.  Of  this  sum  we  take  a  little  upwards  of 
a;  1,500,000.  The  residue,  of  about  £20,000,000,  she  must 
sell  to  other  foreign  powers  than  to  the  United  States. 
Now  their  market  will  continue  open  to  her  as  much 
after  the  passage  of  this  bill  as  before.  She  will  there- 
fore require  from  us  the  raw  material  to  supply  their 
consumption.  But,  it  is  said,  she  may  refuse  to  pur- 
chase it  of  us,  and  seek  a  supply  elsewhere.  There  can 
be  but  little  doubt  that  she  now  resorts  to  us,  because 
we  can  supply  her  more  cheaply  and  better  than  any 
other  country.  And  it  would  be  unreasonable  to  sup- 
pose that  she  would  cease,  from  any  pique  towards  us, 
to  pursue  her  own  interest.  Suppose  she  was  to  de- 
cline purchasing  from  us.  The  consequence  would  be, 
that  she  would  lose  the  market  for  the  £20,000,000, 


SPEECH  OF  1824.  283 

which  she  now  sells  other  foreign  powers,  or  enter  it 
under  a  disadvantageous  competition  with  us,  or  with 
other  nations,  who  should  obtain  their  supplies  of  the 
raw  material  from  us.  If  there  should  be  any  diminu- 
tion, therefore,  in  the  exportation  of  cotton,  it  would 
only  be  in  the  proportion  of  about  one  and  a  half  to 
twenty  ;  that  is,  a  little  upwards  of  5%  ;  the  loss  of  a 
market  for  which,  abroad,  would  be  fully  compensated 
by  the  market  for  the  article  created  at  home.  Lastly, 
I  would  observe  that,  the  new  application  of  ou.r  indus- 
try produciiTg  new  objects  of  exportation,  and  they 
possessing  much  greater  value  than  in  the  raw  state, 
we  should  be  in  the  end  amply  indemnified  by  their 
exportation.  Already  the  item  in  our  foreign  exports 
of  manufactures  is  considerable  ;  and  we  know  that  our 
cotton  fabrics  have  been  recently  exported  in  a  large 
amount  to  South  America,  where  they  maintain  a  suc- 
cessful competition  with  those  of  any  other  country. 

Third.  The  third  objection  to  the  tariff  is  that  it  will 
diminish  our  navigation.  This  great  interest  deserves 
every  encouragement,  consistent  with  the  paramount 
interest  of  agriculture.  In  the  order  of  nature  it  is 
secondary  to  both  agriculture  and  manufactures.  Its 
business  is  the  transportation  of  the  productions  of 
those  two  superior  branches  of  industry.  It  cannot 
therefore  be  expected  that  they  shall  be  moulded  or  sac- 
7'ificed  to  suit  its  purposes  ;  but,  on  the  contrary,  navi- 
gation must  accommodate  itself  to  the  actual  state  of 
agriculture  and  manufactures.  If,  as  I  believe,  we  have 
nearly  reached  the  maximum  in  value  of  our  exports 
of  raw  produce  to  Europe,  the  effect  hereafter  will  be, 
as  it  respects  that  branch  of  our  trade,  if  we  perse- 
vere in  the  foreign  system,  to  retain  our  navigation  at 
the  point  which  it  has  now  reached.  By  reducing,  in- 
deed, as  will  probably  take  place,  the  price  of  our  raw 
materials,  a  further  quantity  of  them  could  be  exported, 


284  HENRY  CLAY. 

and,  of  course,  additional  employment  might,  in  that 
way,  be  given  to  onr  tonnage  ;  but  that  would  be  at  the 
expense  of  the  agricultural  interest.  If  I  am  right  in 
supposing  that  no  effect  will  be  produced  by  this  mea- 
sure u})on  any  other  branch  of  our  export  trade  but 
that  to  Europe,  that  with  regard  to  that  there  will  be 
no  sensible  diminution  of  our  exports,  and  that  the 
new  direction  given  to  a  portion  of  our  industry  will 
produce  other  objects  of  exportation,  the  probability  is 
that  our  foreign  tonnage  will  be  even  increased  under 
the  operation  of  this  bill.  But,  if  I  am  mistaken  in 
these  views,  and  it  should  experience  any  reduction,  the 
increase  in  our  coasting  tonnage,  resulting  from  the 
greater  activity  of  domestic  exchanges,  will  more  than 
compensate  the  injury.  Although  our  navigation  par- 
takes of  the  general  distress  of  the  country,  it  is  less 
depressed  than  any  other  of  our  great  interests.  The 
foreign  tonnage  has  been  gradually,  though  slowly,  in- 
creasing since  1818.  And  our  coasting  tonnage  since 
1816  has  increased  upwards  of  100,000  tons. 

Fourth.  It  is  next  contended  that  the  effect  of  the 
measure  will  be  to  diminish  our  foreign  commerce.  The 
ol)jection  assumes,  what  I  have  endeavored  to  contro- 
vert, that  there  will  be  a  reduction  in  the  value  of  our 
exports.  Commerce  is  an  exchange  of  commodities. 
Whatever  will  tend  to  augment  the  wealth  of  a  nation 
must  increase  its  capacity  to  make  these  exchanges. 
By  new  productions,  or  creating  new  values  in  the 
fabricated  forms  which  shall  be  given  to  old  objects  of 
our  industry,  we  shall  give  to  commerce  a  fresh  spring, 
a  new  aliment.  The  foreign  commerce  of  the  country, 
from  causes  some  of  which  I  have  endeavored  to  point 
out,  has  been  extended  as  far  as  it  can  be.  And  I  think 
there  can  be  but  little  doubt  that  the  balance  of  trade 
is,  and  for  some  time  past  has  been,  against  us.  I  was 
surprised  to  hear  the  learned  gentleman  from  Massar 


SPEECH  OF  1824.  285 

chusetts  [Mr.  Webster]  rejecting,  as  a  detected  and  ex- 
ploded fallacy,  the  idea  of  a  balance  of  trade.     I  have 
not  time  nor  inclination  now  to  discuss  that  topic.    But 
I  will  observe  that  all  nations  act  upon  the  supposition 
of  the  reality  of  its  existence,  and  seek  to  avoid  a  trade 
the  balance  of  which  is  unfavorable,  and  to  foster  that 
which  presents  a  favorable  balance.     However  the  ac- 
count be  made  up,  whatever  may  be  the  items  of  a  trade, 
commodities,  fishing  industry,  marine  labor,  the  carry- 
ing trade,  all  of  which  I  admit  should  be  comprehended, 
there  can  be  no  doubt,  I  think,  that  the  totality  of  the 
exchanges  of  all  descriptions  made  by  one  nation  with 
another,  or  against  the  totality  of  the  exchanges  of  all 
other  nations  together,  may  be  such  as  to  present  the 
state  of  an  unfavorable  balance  with  the  one  or  with  all. 
It  is  true  that,  in  the  long  run,  the  measures  of  these 
exchanges,  that  is,  the  totality  in  value  of  what  is  given 
and  of  what  is  received,  must  be  equal  to  each  other. 
But  great  distress   may  be  felt  long  before  the  counter- 
poise can  be  effected.     In  the  mean  time  there  will  be 
an  export  of  the  precious  metals,  to  the  deep  injury  of 
internal   trade,  an  unfavorable  state  of    exchange,  an 
export  of   public    securities,  a   resort   to   credit,    debt, 
mortgages.     JNIost  of  if  not  all  these  circumstances  are 
believed  now  to  be  indicated  by  our  country  in  its  for- 
eign commercial  relations.     What  have  we  received,  for 
example,  for  the  public  stocks  sent  to  England  ?  Goods. 
But  those   stocks  are  our   bond,  which  must  be  paid. 
Although  the  solidity  of  the  credit  of  the  English  pub- 
lic securities  is  not  surpassed  by  that  of  our  own,  strong 
as  it  justly  is,  when  have  we  seen  English  stocks  sold  in 
our  market,  and  regularly  quoted  in  the  prices  current, 
as  American  stocks  are  in  England  ?     An  unfavorable 
balance  with  one  nation  may  be  made  up  by  a  favorable 
balance  with  other  nations  ;  but  the  fact  of  the  existence 
of  that  unfavorable  balance  is  strong  presumptive  evi- 


28G  IIENKY  CLAY. 

deuce  against  the  trade.  Commerce  will  regulate  itself! 
Yes,  and  the  extravagance  of  a  spendthrift  heir  who 
squanders  the  rich  patrimony  which  has  descended  to 
him  will  regulate  itself  ultimately.  But  it  will  be  a 
regulation  which  will  exhibit  him  in  the  end  safely  con- 
lined  within  the  walls  of  a  jail.  Commerce  will  regu- 
late itself  !  But  is  it  not  the  duty  of  wise  governments 
to  watch  its  course,  and  beforehand  to  provide  against 
even  distant  evils,  by  prudent  legislation  stimulating 
the  industry  of  their  own  people,  and  checking  the 
policy  of  foreign  powers  as  it  operates  on  them  ?  The 
supply,  then,  of  the  subjects  of  foreign  commerce,  no 
less  than  the  supply  of  consumption  at  home,  requires 
of  us  to  give  a  portion  of  our  labor  such  a  direction  as 
will  enable  us  to  produce  them.  That  is  the  object  of 
the  measure  under  consideration,  and  I  cannot  doubt 
that,  if  adopted,  it  will  accomplish  its  object. 

Fifth.  The  fifth  objection  to  the  tariff  is  that  it  will 
diminish  the  public  revenue,  disable  us  from  paying  the 
public  debt,  and  finally  compel  a  resort  to  a  system  of 
excise  and  internal  taxation.  This  objection  is  founded 
upon  the  supposition  that  the  reduction  in  the  importa- 
tion of  the  subjects  on  which  the  increased  duties  are 
to  operate  will  be  such  as  to  produce  the  alleged  effect. 
All  this  is  matter  of  mere  conjecture,  and  can  only  be 
determined  by  experiment.  I  have  very  little  doubt, 
with  my  colleague  [Mr.  Trimble],  that  the  revenue  will 
be  increased  considerably,  for  some  years  at  least,  under 
the  operation  of  this  bill.  The  diminution  in  the  quan- 
tity imported  will  be  compensated  by  the  augmentation 
of  the  duty.  In  reference  to  the  article  of  molasses,  for 
example,  if  the  import  of  it  should  be  reduced  50%,  the 
amount  of  duty  collected  would  be  the  same  as  it  now 
is.  But  it  will  not,  in  all  probability,  be  reduced  by 
anything  like  that  proportion.  And  then  there  are  some 
other  articles  which  will  continue  to  be  introduced  in  as 


SPEECH  OF  1S24.  287 

large  quantities  as  ever,  notwithstanding  the  increase  of 
duty,  the  object  in  reference  to  them  being  revenue,  and 
not  the  encouragement  of  domestic  manufactures.  An- 
other cause  will  render  the  revenue  of  this  year,  in  par- 
ticular, much  more  productive  than  it  otherwise  would 
have  been ;  and  that  is  that  large  quantities  of  goods 
have  been  introduced  into  the  country  in  anticipation 
of  the  adoption  of  this  measure.  The  eagle  does  not 
dart  a  keener  gaze  upon  his  intended  prey  than  that 
with  which  the  British  manvifacturer  and  merchant 
watches  the  foreign  market,  and  the  course  even  of  our 
elections  as  well  as  our  legislation.  The  passage  of 
this  bill  has  been  expected ;  and  all  our  information  is 
that  the  importations,  during  this  spring,  have  been  im- 
mense. But,  further,  the  measure  of  our  importations 
is  that  of  our  exportations.  If  I  am  right  in  supposing 
that  in  future  the  amount  of  these,  in  the  old  or  new 
forms  of  the  produce  of  our  labor,  will  not  be  dimin- 
ished, but  probably  increased,  then  the  amount  of  our 
importations,  and  consequently  of  our  revenue,  will  not 
be  reduced,  but  may  be  extended.  If  these  ideas  be 
correct,  there  will  be  no  inability  on  the  part  of  gov- 
ernment to  extinguish  the  public  debt.  The  payment 
of  that  debt,  and  the  consequent  liberation  of  the  public 
resources  from  the  charge  of  it,  is  extremely  desirable. 
No  one  is  more  anxious  than  I  am  to  see  that  important 
object  accomplished.  But  I  entirely  concur  with  the 
gentleman  from  Virginia  [Mr.  Barbour]  in  thinking 
that  no  material  sacrifice  of  any  of  the  great  interests 
of  the  nation  ought  to  be  made  to  effectuate  it.  Such 
is  the  elastic  and  accumulating  nature  of  our  public  re- 
sources, from  the  silent  augmentation  of  our  population, 
that  if,  in  any  given  state  of  the  public  revenue,  we 
throw  ourselves  upon  a  couch  and  go  to  sleep,  we  may, 
after  a  short  time,  awake  with  an  ability  abundantly 
increased  to  redeem  any  reasonable  amount  of  public 


288  HENRY  CLAY. 

debt  with  wliieh  ve  may  hapjx'ii  to  be,  burdened.     The 
})ublic   debt  of   the    United  States,  though  nominally 
larger  now  than  it  was  in  the  year  1791,  bears  really  no 
sort  of  discouraging  comparison  to  its   amount  at  that 
time,  whatever  standard  we  may  choose  to  adopt  to  in- 
stitute the  comparison.  It  was  in  1791  about  $75,000,000. 
It  is  now  about  .3^90,000,000.     Then  we  had  a  population 
of  about  4,000,000.    Now  we  have  upwards  of  10,000,000. 
Then  we  had  a  revenue  short  of  $5,000,000.     Now  our 
revenue  exceeds  $20,000,000.     If  we  select  population 
as  the  standard,  our  present  population  is  150%  greater 
than   it  was   in  1791 ;    if  revenue,  that  is    four   times 
more  now  than  at  the  former  period ;  whilst  the  public 
debt  has  increased  only  in  a  ratio  of  20%.     A  public 
debt  of  $300,000,000,  at  the  present  day,  considering  our 
actual  ability,  compounded  both  of  the  increase  of  pop- 
ulation and  of  revenue,  would  not  be  more  onerous  now 
than  the  debt  of  $75,000,000  was  at  the  epoch  of  1791, 
in  reference  to  the  same  circumstances.     If  I  am  right 
in  supposing  that,  under  the  operation  of  the  proposed 
measure,  there  will  not  be  any  diminution,  but  a  proba- 
ble increase  of  the  public  revenue,  there  will  be  no  diffi- 
culty in  defraying  the  current  expenses  of  government, 
and  paying  the  principal  as  well  as  the  interest  of  the 
public  debt  as  it  becomes  due.     Let  us,  for  a  moment, 
however,  indulge  the  improbable  supposition  of  the  op- 
ponents of  the  tariff,  that  there  will  be  a  reduction  of 
the  revenue  to  the  extent  of  the  most  extravagant  calcu- 
lation which  has  been  made,  that  is  to  say,  to  the  extent 
of  $5,000,000.     That  sum  deducted,  we  shall  still  have 
remaining  a  revenue  of  about  $15,000,000.     The  treas- 
ury estimates  of  the  current  service  of  the  years  1822, 
1823,  and  1824  exceeds,  each  year,  $9,000,000.      The 
lapse  of  revolutionary  pensions,  and  judicious  retrench- 
ments which  might  be  made  without  detriment  to  any 
of  the  essential  establishments  of  the  country,  would 


SPEHCB  OF  1824.  289 

probably  reduce  them  below  $9,000,000.  Let  us  assume 
that  sum,  to  which  add  about  $5,500,000  for  the  interest 
of  the  public  debt,  and  the  wants  of  government  would 
require  a  revenue  of  $14,500,000,  leaving  a  surplus  of 
revenue  of  $500,000  beyond  the  public  expenditure. 
Thus,  by  a  postponement  of  the  payment  of  the  prin- 
cipal of  the  puljlic  debt,  in  which  the  public  creditors 
would  gladly  acquiesce,  and  confiding,  for  the  means  of 
redeeming  it,  in  the  necessary  increase  of  our  revenue 
from  the  natural  augmentation  of  our  population  and 
consumption,  we  may  safely  adopt  the  proposed  measure, 
even  if  it  should  be  attended  (which  is  confidently  de^ 
nied)  with  the  supposed  diminution  of  revenue.  We 
shall  not,  then,  have  occasion  to  vary  the  existing  sys- 
tem of  taxation  ;  we  shall  be  under  no  necessity  to  re- 
sort either  to  direct  taxes  or  to  an  excise.  But,  suppose 
the  alternative  were  really  forced  upon  us  of  continix- 
ing  the  foreign  system,  with  its  inevitable  impoverish- 
ment of  the  country,  but  with  the  advantage  of  the  pre- 
sent mode  of  collecting  the  taxes,  —  or  of  adopting  the 
American  system,  with  its  increase  of  the  national 
wealth,  but  with  the  disadvantage  of  an  excise :  could 
any  one  hesitate  between  them  ?  Customs  and  an  ex- 
cise agree  in  the  essential  particulars,  that  they  are 
both  taxes  upon  consumption,  and  both  are  voluntary. 
They  differ  only  in  the  mode  of  collection.  The  office 
for  the  collection  of  one  is  located  on  the  frontier,  and 
that  for  the  other  within  the  interior.  I  believe  it  was 
Mr.  Jefferson,  who,  in  reply  to  the  boast  of  a  citizen  of 
New  York  of  the  amount  of  the  public  revenue  paid  by 
that  city,  asked  who  would  pay  it,  if  the  collector's  of- 
fice were  removed  to  Paulus  Hook,  on  the  New  Jersey 
shore  ?  National  wealth  is  the  source  of  all  taxation. 
And;  my  word  for  it,  the  people  are  too  intelligent  to 
be  deceived  by  mere  names,  and  not  to  give  a  decided 
preference  to  that  system  whicli   is  basod   upon   thoir 


290  HENRY  CLAY. 

wealth  and   prosperity,   rather   than   to  that  which  is 
founded  npon  their  impoverishment  and  ruin. 

Sixth.     ]>iit,  according  to  tlie  opponents  of  the  do- 
mestic policy,  the  proposed  system  will  force  capital 
and  labor  into  new  and  reluctant  employments  ;  we  are 
not  prepared,  in  consequence  of  the  high  price  of  wages, 
for  the  successful  establishment  of  manufactures,  and 
we  must  fail  in  the  experiment.     We  have  seen  that 
the  existing  occupations  of  our  society,  those  of  agri- 
culture, commerce,  navigation,  and  the  learned  profes- 
sions, are  overflowing   with   competitors,  and  that  the 
want  of  employment  is  severely  felt.     Now  what  does 
this  bill  propose  ?     To  open  a  new  and  extensive  field 
of  business,  in  which  all  that  choose  may  enter.     There 
is  no  compulsion  upon   any  one  to  engage  in  it.     An 
option   only  is  given   to    industry,  to   continue  in  the 
present  unprofitable   pursuits,  or  to  embark  in  a  new 
and  promising  one.     The    effect  will  be  to  lessen  the 
competition  in  the   old   branches   of   business,  and  to 
multiply  our  resources  for  increasing  our  comforts  and 
augmenting  the  national  wealth.     The  alleged  fact  of 
the  high  price  of  wages  is   not  admitted.     The  truth 
is  that  no  class  of  societ}^  suffers  more,  in  the  present 
stagnation  of  business,  than  the  laboring  class.     That 
is  a  necessary  effect  of  the  depression  of  agriculture, 
tlie  principal  business  of  the  community.     The  wages 
of  able-bodied  men  vary  from  $5  to  $8  per  month,  and 
such  has  been  the  want  of  employment,  in  some  parts 
of  the  Union,  that  instances  have  not  been  unfrequent 
of  men  working  merely  for  the  means  of  present  sub- 
sistence.    If  the  wages  for  labor  here  and  in  England 
are  compared,  they  will  be  found  not  to  be  essentially 
different.     I  agree  with  the  honorable  gentleman  from 
Virginia,  that  high  wages  are  a  proof  of  national  pros- 
perity ;  we  differ  only  in  the  means  by  which  that  desir- 
able end  shall  be  attained.     But,  if  the  fact  were  true, 


SPEECH  OF  1824.  291 

that  the  wages  of  labor  are  high,  I  deny  the  correct- 
ness of  the  argument  founded  upon  it.  The  argument 
assumes  that  natural  labor  is  the  principal  element  in 
the  business  of  manufacture.  That  was  the  ancient 
theory.  But  the  valuable  inventions  and  vast  improve- 
ments in  machinery,  which  have  been  made  within  a 
few  past  years,  have  produced  a  new  era  in  the  arts. 
The  eifect  of  this  change,  in  the  powers  of  production, 
may  be  estimated,  from  wliat  I  have  already  stated  in 
relation  to  England  and  to  the  triumphs  of  European 
artificial  labor  over  the  natural  labor  of  Asia.  In  con- 
sidering the  fitness  of  a  nation  for  the  establishment 
of  manufactures,  we  must  no  longer  limit  our  views  to 
the  state  of  its  population  and  the  price  of  wages.  All 
circumstances  must  be  regarded,  of  which  that  is,  per- 
haps, the  least  important.  Capital,  ingenuity  in  the 
construction  and  adroitness  in  the  use  of  machinery, 
and  the  possession  of  the  raw  materials,  are  tliose 
which  deserve  the  greatest  consideration.  All  these 
circumstances  (except  that  of  capital,  of  which  there  is 
no  deficiency)  exist  in  our  country  in  an  eminent  de- 
gree, and  more  than  counterbalance  the  disadvantage, 
if  it  really  existed,  of  the  lower  wages  of  labor  in 
Great  Britain.  The  dependence  upon  foreign  nations 
for  the  raw  material  of  any  great  manufacture  has  been 
ever  considered  as  a  discouraging  fact.  The  state  of 
our  population  is  peculiarly  favorable  to  the  most  ex- 
tensive introduction  of  machinery.  We  have  no  preju- 
dices to  combat,  no  persons  to  drive  out  of  employment. ' 
The  pamphlet  to  which  we  have  had  occasion  so  often 
to  refer,  in  enumerating  the  causes  which  have  brought 
in  England  their  manufactures  to  such  a  state  of  per- 
fection, and  which  now  enable  them,  in  the  opinion  of 
the  writer,  to  defy  all  competition,  does  not  specify, 
as  one  of  them,  low  wages.  It  assigns  three  :  first, 
capital ;  secondly,  extent  and  costliness  of  machinery ; 


292  HENRY  CLAY. 

and,  thirdly,  steady  and  persevering  industry.  Not- 
withstanding tlic  concurrence  of  so  many  favorable 
causes  in  our  country  for  the  introduction  of  the  arts, 
we  are  earnestly  dissuaded  from  making  the  experi- 
ment, and  onr  ultimate  failure  is  confidently  predicted. 
Why  should  we  fail  ?  Nations,  like  men,  fail  in  no- 
thing which  the}'^  boldly  attempt,  when  sustained  by  vir- 
tuous purpose  and  firm  resolution,  I  am  not  willing  to 
admit  this  depreciation  of  American  skill  and  enter- 
prise. I  am  not  Avilling  to  strike  before  an  effort  is 
made.  All  our  past  history  exhorts  us  to  proceed,  and 
inspires  us  with  animating  hopes  of  success.  Past  pre- 
dictions of  our  incapacity  have  failed,  and  present  pre- 
dictions will  not  be  realized.  At  the  commencement  of 
this  government,  we  were  told  that  the  attempt  would 
be  idle  to  construct  a  marine  adequate  to  the  commerce 
of  the  country,  or  even  to  the  business  of  its  coasting 
trade.  The  founders  of  our  government  did  not  listen 
to  these  discouraging  counsels  ;  and  —  behold  the  fruits 
of  their  just  comprehension  of  our  resources !  Our 
restrictive  policy  was  denounced,  and  it  was  foretold 
that  it  would  utterly  disappoint  all  our  expectations. 
But  our  restrictive  policy  has  been  eminently  success- 
fu.1 ;  and  the  share  which  our  navigation  now  enjoys  in 
the  trade  with  France,  and  with  the  British  West  India 
islands,  attests  its  victory.  What  were  not  the  dis- 
heartening predictions  of  the  opponents  of  the  late 
war  ?  Defeat,  discomfiture,  and  disgrace,  were  to  be 
the  certain,  but  not  the  worst  effect  of  it.  Here,  again, 
did  prophecy  prove  false  ;  and  the  energies  of  our  coun- 
try, and  the  valor  and  the  patriotism  of  our  people, 
carried  us  gloriously  through  the  war.  We  are  now, 
and  ever  will  be,  essentially  an  agricultural  people. 
Without  a  material  change  in  the  fixed  habits  of  the 
country,  the  friends  of  this  measure  desire  to  draw  to 
it,  as  a  powerful  auxiliary  to  its  industry,  the  manu- 


SPEECH  OF  1824.  298 

factoring  arts.  The  difference  between  a  nation  with 
and  without  the  arts  may  be  conceived  by  the  differ- 
ence between  a  keel-boat  and  a  steamboat,  combating 
the  rapid  torrent  of  tbe  Mississippi.  How  slow  does 
the  former  ascend,  hugging  the  sinuosities  of  the  shore, 
pushed  on  by  her  hardy  and  exposed  crew,  now  throw- 
ing themselves  in  vigorous  concert  on  their  oars,  and 
then  seizing  the  pendant  boughs  of  overhanging  trees  : 
she  seems  hardly  to  move  ;  and  her  scanty  cargo  is 
scarcely  worth  the  transportation  !  With  what  ease 
is  she  not  passed  by  the  steamboat,  laden  with  the 
riches  of  all  quarters  of  the  world,  with  a  crew  of  gay, 
cheerful,  and  protected  passengers,  now  dashing  into 
the  midst  of  the  current,  or  gliding  through  the  eddies 
near  the  shore  !  Nature  herself  seems  to  survey  with 
astonishment  the  passing  wonder,  and,  in  silent  sub- 
mission, reluctantly  to  own  the  magnificent  triumphs, 
in  her  own  vast  dominion,  of  Fulton's  immortal  genius. 
Seventh.  But  it  is  said  that,  wherever  there  is  a  con- 
currence of  favorable  circumstances,  manufactures  will 
arise  of  themselves,  without  protection ;  and  that  we 
should  not  disturb  the  natural  progress  of  industry,  but 
leave  things  to  themselves.  If  all  nations  would  mod- 
ify their  policy  on  this  axiom,  perhaps  it  would  be 
better  for  the  common  good  of  the  whole.  Even  then, 
in  consequence  of  natiiral  advantages  and  a  greater 
advance  in  civilization  and  in  the  arts,  some  nations 
would  enjoy  a  state  of  much  higher  prosperity  than 
others.  But  there  is  no  universal  legislation.  The 
globe  is  divided  into  different  communities,  each  seek- 
ing to  appropriate  to  itself  all  the  advantages  it  can, 
without  reference  to  the  prosperity  of  others.  Whether 
this  is  right  or  not,  it  always  has  been,  and  ever  will 
be  the  case.  Perhaps  the  care  of  the  interests  of  one 
people  is  sufficient  for  all  the  wisdom  of  one  legislature ; 
and  that  it  is  among  nations  as  among  individuals,  that 


294  HENRY  CLAY. 

the  happiness  of  the  wliole  is  best  secured  by  each  at- 
tending to  its  own  peculiar  interests.  The  proposition 
to  be  maintained  by  our  adversaries  is  that  manufac- 
tures, without  protection,  will  in  due  time  spring  up  in 
our  country,  and  sustain  themselves  in  a  competition 
with  foreign  fabrics,  however  advanced  the  arts  and 
whatever  the  degree  of  protection  may  be  in  foreign 
countries.  Now  I  contend,  that  this  i)roposition  is  re- 
futed by  all  experience,  ancient  and  modern,  and  in 
every  country.  If  I  am  asked  why  unprotected  indus- 
try should  not  succeed  in  a  struggle  with  protected  in- 
dustry, I  answer,  the  fact  has  ever  been  so,  and  that 
is  sufficient ;  I  reply  that  uniform  experience  evinces 
that  it  cannot  succeed  in  such  an  unequal  contest, 
and  that  is  sufficient.  If  we  speculate  on  the  causes  of 
this  universal  truth,  we  may  differ  about  them.  Still 
the  indisputable  fact  remains.  And  we  should  be  as 
unwise  in  not  availing  ourselves  of  the  guide  which  it 
furnishes  as  a  man  would  be  who  should  refuse  to  bask 
in  the  rays  of  the  sun,  because  he  could  not  agree  with 
Judge  Woodward  as  to  the  nature  of  the  substance  of 
that  planet  to  which  we  are  indebted  for  heat  and  light. 
If  I  were  to  attempt  to  particularize  the  causes  which 
prevent  the  success  of  the  manufacturing  arts  without 
protection,  I  should  say  that  they  are,  first,  the  obdu- 
racy of  fixed  habits.  ISTo  nation,  no  individual,  will 
easily  change  an  established  course  of  business,  even  if 
it  be  unprofitable ;  and  least  of  all  is  an  agricultural 
people  prone  to  innovation.  With  what  rehictance  do 
they  not  adopt  improvements  in  the  instruments  of 
husbandry,  or  in  modes  of  cultivation !  If  the  farmer 
makes  a  good  crop  and  sells  it  badly,  or  makes  a  short 
crop,  buoyed  up  by  hope  he  perseveres,  and  trusts  that 
a  favorable  change  of  the  market,  or  of  the  seasons,  will 
enable  him,  in  the  succeeding  year,  to  repair  the  mis- 
fortunes of  the  past.     Secondly,  the  uncertainty,  flue- 


SPEECH  OF  1824.  295 

tuation,  and  unsteadiness  of  the  home  market,  when 
liable  to  an  unrestricted  influx  of  fabrics  from  all  for- 
eign nations  ;  and,  thirdly,  the  superior  advance  of  skill, 
and  amount  of  capital,  which  foreign  nations  have  ob- 
tained by  the  protection  of  their  own  industry.  From 
the  latter,  or  from  other  causes,  the  unprotected  manu- 
factures of  a  coiintry  are  exposed  to  the  danger  of  being 
crushed  in  their  infancy,  either  by  the  design  or  from 
the  necessities  of  foreign  manufacturers.  Gentlemen 
are  incredulous  as  to  the  attempts  of  foreign  merchants 
and  manufacturers  to  accomplish  the  destruction  of 
ours.  Why  should  they  not  make  such  attempts  ?  If 
the  Scottish  manufacturer,  by  surcharging  our  market 
in  one  year  with  the  article  of  cotton  bagging,  for  ex- 
ample, should  so  reduce  the  price  as  to  discourage  and 
put  down  the  home  manufacture,  he  would  secure  to 
himself  the  monopoly  of  the  supply.  And  now,  having 
the  exclusive  possession  of  the  market,  perhaps  for  a 
long  term  of  years,  he  might  be  more  than  indemnified 
for  his  first  loss,  in  the  subsequent  rise  in  the  price  of 
the  article.  What  have  we  not  seen  under  our  own 
eyes !  The  competition  for  the  transportation  of  the 
mail,  between  this  place  and  Baltimore,  so  excited,  that 
to  obtain  it  an  individual  offered,  at  great  loss,  to  carry 
it  a  whole  year  for  one  dollar  !  His  calculation  no 
doubt  was,  that,  by  driving  his  competitor  off  the  road, 
and  securing  to  himself  the  carriage  of  the  mail,  he 
would  be  afterwards  able  to  repair  his  original  loss  by 
new  contracts  with  the  department.  But  the  necessi- 
ties of  foreign  manufacturers,  without  imputing  to  them 
any  sinister  design,  may  oblige  them  to  throw  into  our 
markets  the  fabrics  which  have  accumulated  on  their 
hands,  in  consequence  of  obstruction  in  the  ordinary 
vents,  or  from  over-calculation  ;  and  the  forced  sales,  at 
losing  prices,  may  prostrate  our  establishments.  From 
this  view  of  the  subject,  it  follows  that,  if  we  would 


296  HEN  BY  CLAY. 

place  the  industry  of  our  country  upon  a  solid  and  un- 
shakable foundation,  we  must  adopt  the  protecting  pol- 
icy, which  has  everywhere  succeeded,  and  reject  that 
which  would  abandon  it,  which  has  everywhere  failed. 

Eighth.  But  if  the  policy  of  protection  be  wise,  the 
gentleman  from  Virginia  (Mr.  Barbou.r)  has  made  some 
ingenious  calculations,  to  prove  that  the  measure  of 
protection  already  extended  has  been  sufficiently  great. 
With  some  few  exceptions,  the  existing  duties,  of  which 
he  has  made  an  estimate,  were  laid  with  the  object  of 
revenue,  and  without  reference  to  that  of  encourage- 
ment to  our  domestic  industry  ;  and  although  it  is  ad- 
mitted that  the  incidental  effect  of  duties,  so  laid,  is  to 
promote  our  manufactures,  yet,  if  it  falls  short  of  com- 
petent protection,  the  duties  might  as  well  not  have 
been  imposed  with  reference  to  that  purpose.  A  mod- 
erate addition  may  accomplish  this  desirable  end  ;  and 
the  proposed  tariff  is  believed  to  have  this  character. 

Ninth.  The  prohibitory  policy,  it  is  confidently  as- 
serted, is  condemned  by  the  wisdom  of  Europe,  and  by 
her  most  enlightened  statesmen.  Is  this  the  fact  ?  We 
call  upon  gentlemen  to  show  in  what  instance  a  nation 
that  has  enjoyed  its  benefits  has  surrendered  it.  [Here 
Mr.  Barbour  rose  (Mr.  Clay  giving  way)  and  said  that 
England  had  departed  from  it  in  the  China  trade,  in 
allowing  us  to  trade  with  her  East  India  possessions, 
and  in  tolerating  our  navigation  to  her  West  India  col- 
onies.] With  respect  to  the  trade  to  China,  the  whole 
amount  of  what  England  has  done  is,  to  modify  the 
monopoly  of  the  East  India  company  in  behalf  of  one 
and  a  small  part  of  her  subjects  to  increase  the  com- 
merce of  another  and  the  greater  portion  of  them.  The 
abolition  of  the  restriction,  therefore,  operates  alto- 
gether among  the  subjects  of  England,  and  does  not 
touch  at  all  the  interests  of  foreign  powers.  The  tol- 
eration of    our  commerce   to  British    India  is  for  the 


SPEECH  OF  1S24.  297 

sake  of  the  specie  with  which  we  mainly  carry  on  that 
commerce,  and  which,  having  performed  its  circuit,  re- 
turns to  Great  Britain  in  exchange  for  British  manu- 
factures. The  relaxation  from  the  colonial  policy,  in 
the  instance  of  our  trade  and  navigation  with  the  West 
Indies,  is  a  most  unfortunate  example  for  the  honora- 
ble gentleman ;  for  in  it  is  an  illustrious  proof  of  the 
success  of  our  restrictive  policy  when  resolutely  adhered 
to.  Great  Britain  had  prescribed  the  terms  on  which 
we  were  to  be  graciously  allowed  to  carry  on  that  trade. 
The  effect  of  her  regulations  was  to  exclude  our  navi- 
gation altogether,  and  a  complete  monopoly  on  the  part 
of  the  British  navigation  was  secured.  We  forbade  it, 
unless  our  vessels  should  be  allowed  a  perfect  recipro- 
city. Great  Britain  stood  out  a  long  time,  but  finally 
yielded,  and  our  navigation  now  fairly  shares  with  hers 
in  the  trade.  Have  gentlemen  no  other  to  exhibit  than 
these  trivial  relaxations  from  the  prohibitory  policy, 
which  do  not  amount  to  a  drop  in  the  bucket,  to  prove 
its  abandonment  by  Great  Britain  ?  Let  them  show  us 
that  her  laws  are  repealed  which  prohibit  the  introduc- 
tion of  our  ilour  and  provisions  ;  of  French  silks,  laces, 
porcelain,  manufactures  of  bronze,  mirrors,  woollens ; 
and  of  the  manufactures  of  all  other  nations ;  and  then 
we  may  be  ready  to  allow  that  Great  Britain  has  really 
abolished  her  prohibitory  policy.  We  find  there,  on 
the  contrary,  that  system  of  policy  in  full  and  rigorous 
operation,  and  a  most  curiously  interwoven  system  it  is, 
as  she  enforces  it.  She  begins  by  jjrotecting  all  parts 
of  her  immense  dominions  against  foreign  nations.  She 
then  protects  the  parent  country  against  the  colonies  ; 
and,  finally,  one  part  of  the  parent  country  against  an- 
other. The  sagacity  of  Scotch  industry  has  carried  the 
]n-ocess  of  distillation  to  a  perfection  which  would  place 
the  art  in  England  on  a  footing  of  disadvantageous  com- 
petition, and  English    distillation   has    been  protected 


298  HENRY  CLAY. 

accordingly.     But  suppose  it  were  even  true  that  Great 
Britain  liad  abolished  all  restrictions  upon  trade,  and 
allowed  the  freest  introduction  of  the  produce  of  foreign 
labor,  would  that  prove  it  unwise  for  us  to  adopt  the 
protecting  system  ?     The  object  of  protection  is  the  es- 
tablishment and  perfection  of  the  arts.     In  England  it 
has  accomplished  its  purpose,  fulfilled  its  end.     If  she 
has   not  carried   every  branch  of  manufacture  to  the 
same  high  state  of  perfection  that  any  other  nation  has, 
she  has  succeeded  in  so  many  tliat  she  may  safely  chal- 
lenge the  most  unshackled  competition  in  exchanges. 
It  is  upon  this  very  ground  that  many  of  her  writers 
recommend  an  abandonment  of  the  prohibitory  system. 
It  is  to  give  greater  scope  to  British  industry  and  enter- 
prise.    It  is  upon  the  same  selfish  principle.     The  ob- 
ject of  the  most  perfect  freedom  of  trade  with  such  a 
nation  as  Britain,  and  of  the  most  rigorous  system  of 
prohibition  with  a  nation  whose  arts  are  in  their  infancy, 
may  both  be  precisely  the  same.     In  both  cases  it  is  to 
give  greater  expansion  to  native  industry.     They  only 
differ  in  the  theatres  of  their  operation.     The  abolition 
of  the  restrictive  system  by  Britain,  if  by  it  she  could 
prevail  upon  other  nations  to  imitate  her  example,  would 
have  the  effect  of  extending  the  consumption  of  British 
produce   in  other   countries  where   her  writers  boldly 
affirm  it  could  maintain  a  fearless  competition  with  the 
produce  of  native  labor.     The  adoption  of  the  restric- 
tive system,  on  the  part  of  the  United  States,  by  exclud- 
ing the  produce  of  foreign  labor,  Avould  extend  the  con- 
sumption of  American  produce,  unable  in  the  infancy 
and  unprotected  state  of  the  arts  to  sustain  a  competi- 
tion with  foreign  fabrics.     Let  our  arts  breathe  under 
the  shade  of  protection  ;  let  them  be  perfected,  as  they 
are  in  England,  and  we  shall  then  be  ready,  as  England 
now  is  said  to  be,  to  put  aside  protection  and  to  enter 
upon  the  freest  exchanges.    To  what  other  cause  than  to 


SPEECH  OF  1824.  299 

their  whole  prohibitory  policy  can  you  ascribe  British 
prosperity  ?  It  will  not  do  to  assign  it  to  thi^t  of  her 
antiquity,  for  France  is  no  less  ancient,  though  much 
less  rich  and  powerful  in  proportion  to  the  population 
and  natural  advantages  of  France.  Hallam,  a  sensible 
and  highly  apj^roved  writer  on  the  Middle  Ages,  assigns 
the  revival  of  the  prosperity  of  the  north  of  Europe  to 
the  success  of  the  Avoollen  manufactories  of  Flanders, 
and  the  commerce  of  which  their  fabrics  became  the 
subject ;  and  the  commencement  of  that  of  England  to 
the  establishment  of  similar  manufactures  there  under 
the  Edwards,  and  to  the  prohibitions  which  began  about 
the  same  time.  As  to  the  poor-rates,  the  theme  of  so 
much  reproach  without  England,  and  of  so  much  regret 
within  it,  among  her  speculative  writers,  the  system 
was  a  strong  proof,  no  less  of  her  unbounded  wealth 
than  of  her  pauperism.  What  other  nation  can  dis- 
pense, in  the  form  of  regulated  charity,  the  enormous 
sum,  I  believe,  of  ten  or  twelve  millions  sterling  ?  [Mr. 
Barbour  stated  it  was  reduced  to  six  ;  to  which  Mr. 
Clay  replied,  that  he  entertained  no  doubt  but  that  tins 
benign  operation  of  British  protection  of  home  industry 
had  greatly  reduced  it  within  the  last  few  years  by  the 
full  employment  of  her  subjects,  of  which  her  flourish- 
ing trade  bore  evidence.]  The  number  of  British  pau- 
])ers  was  the  result  of  pressing  the  i)rin('i[ile  of  popula- 
tion to  its  utmost  limits  by  her  protecting  policy,  in 
the  creation  of  wealth,  and  in  placing  the  rest  of  the 
world  under  tribute  to  her  industry.  Doubtless  the  con- 
dition of  England  would  be  better  without  paupers,  if 
in  other  respects  it  remained  the  same.  But  in  her 
actual  circumstances  the  poor  system  has  the  salutary 
effect  of  an  eipializing  corrective  of  the  tendency  to 
the  concentration  of  riches,  pro(U;ced  by  the  genius  of 
her  political  institutions  and  l)y  her  ])rohibitory  system. 
But  is  it  true,  that  England  is  convinced  of  the  im- 


300  HENIiY  CLAY. 

policy  of  the  proliibitoiy  system,  and  desirous  to  aban- 
don it  ?  What  proof  have  we  to  that  effect  ?  We  are 
asked  to  reject  the  evidence  deducible  from  the  settled 
and  steady  practice  of  England,  and  to  take  lessons  in 
a  school  of  philosophical  writers  whose  visionary  theo- 
ries are  nowhere  adopted  ;  or  if  adopted,  bring  with 
them  inevitable  distress,  impoverishment,  and  ruin. 
Let  us  hear  the  testimony  of  an  illustrious  personage, 
entitled  to  the  greatest  attention,  because  he  speaks 
after  the  full  experiment  of  the  unrestrictive  system 
made  in  his  own  empire.  I  hope  I  shall  give  no  offense 
in  quoting  from  a  publication  issued  from  "  the  mint  of 
riiiladelphia ;  "  from  a  work  of  Mr.  Carey,  of  whom  I 
seize,  with  great  pleasure,  the  occasion  to  say,  that  he 
merits  the  public  gratitude  for  the  disinterested  dili- 
gence with  which  he  has  collected  a  large  mass  of  highly 
useful  facts,  and  for  the  clear  and  convincing  reasoning 
with  which  he  generally  illustrates  them.  The  Emperor 
of  Russia,  in  March,  1822,  after  about  two  years'  trial 
of  the  free  system,  says,  through  Count  Nesselrode  :  — 

'•  To  produce  happy  effects,  the  principles  of  com- 
mercial freedom  must  be  generally  adopted.  The  State 
which  adopts,  whilst  others  reject  them,  must  condemn 
its  own  industry  and  commerce  to  pay  a  ruinous  tribute 
to  those  of  other  nations. 

"  From  a  circulation  exempt  from  restraint,  and  the 
facility  afforded  by  reciprocal  exchanges,  almost  all  the 
governments  at  first  resolved  to  seek  the  means  of  re- 
pairing the  evil  which  Europe  had  been  doomed  to 
suffer ;  but  experience  and  more  correct  calculations, 
because  they  were  made  from  certain  data,  and  upon 
the  results  already  known  of  the  peace  that  had  just 
taken  place,  forced  them  soon  to  adhere  to  the  prohibi- 
tory system. 

"  England  preserved  hers.  Austria  remained  faithful 
to  the  rule  she  had  laid  down,  to  guard  herself  against 


SPEECH  OF  1824.  SOI 

the  rivalsliip  of  foreign  industry.  France,  with  the 
same  views,  adopted  the  most  rigorous  measures  of  j)re- 
caution.  And  Prussia  published  a  new  tariff  in  Octo- 
ber last,  which  proves  that  she  found  it  impossible  not 
to  follow  the  example  of  the  rest  of  Europe." 

"  lu  proportion  as  the  prohibitory  system  is  extended 
and  rendered  perfect  in  other  countries,  that  State 
which  pursues  the  contrary  system  makes  from  day  to 
day  sacrifices  more  extensive  and  more  considerable. 
...  It  offers  a  continual  encouragement  to  the  manu- 
factures of  other  countries,  and  its  own  manufactures 
perish  in  the  struggle  which  they  are,  as  yet,  unable  to 
maintain. 

"  It  is  with  the  most  lively  feelings  of  regret  we  ac- 
knowledge it  is  our  own  proper  experience  which  ena- 
bles us  to  trace  this  picture.  The  evils  which  it  details 
have  been  realized  in  Eussia  and  Poland,  since  the  con- 
clusion of  the  act  of  the  7th  and  19th  of  Decembei', 
1818.  Agriculture  without  a  market,  industry  without 
protection,  languish  and  decline.  Specie  is  exported, 
and  the  most  solid  commercial  houses  are  shaken.  The 
public  prosperity  would  soon  feel  the  wound  infliettHl 
on  private  fortunes,  if  new  regulations  did  not  promptly 
change  the  actual  state  of  alfairs. 

"Events  have  proved  that  our  agriculture  and  our 
commerce,  as  well  as  our  manvifacturing  industry,  are 
not  only  paralyzed,  but  brought  to  the  brink  of  ruin." 

The  example  of  Spain  has  been  properly  referred  t(j, 
as  affording  a  striking  proof  of  the  calamities  which 
attend  a  State  that  abandons  the  care  of  its  own  in- 
ternal industry.  Her  prosperity  was  the  greatest  when 
the  arts,  brought  there  by  the  Moors,  flourished  most 
in  that  kingdom.  Then  she  received  from  England 
her  wool,  and  returned  it  in  the  manufactured  state ; 
and  then  England  was  least  prosj)erous.  The  two  na- 
tions  have   reversed   conditions.     Spain,  after  the  dis- 


302  HENRY  CLAY. 

coveiy  of  America,  yielding  to  an  inordinate  passion 
for  the  gold  of  the  Indies,  sought  in  their  mines  that 
wealth  which  might  have  been  better  created  at  home. 
Can  the  remarkable  difference  in  the  state  of  the  pros- 
perity of  the  two  countries  be  otherwise  explained  than 
by  the  opposite  systems  which  they  pursued  ?  England, 
by  a  sedulous  attention  to  her  home  industry,  supijlied 
the  means  of  an  advantageous  commerce  with  her  colo- 
nies. Spain,  by  an  utter  neglect  of  her  domestic  re- 
sources, confided  altogether  in  those. which  she  derived 
from  her  colonies,  and  presents  an  instance  of  the  great- 
est adversity.  Her  colonies  were  infinitely  more  valua- 
ble than  those  of  England ;  and,  if  she  had  adopted  a 
similar  policy,  is  it  unreasonable  to  suppose  that  in 
wealth  and  power  she  would  have  surpassed  that  of 
England  ?  I  think  the  honorable  gentleman  from  Vir- 
ginia does  great  injustice  to  the  Catholic  religion,  in 
specifying  that  as  one  of  the  leading  causes  of  the  de- 
cline of  Spain.  It  is  a  religion  entitled  to  great  respect, 
and  there  is  nothing  in  its  character  incompatible  with 
the  highest  degree  of  national  prosperity.  Is  not  France, 
the  most  polished,  in  many  other  respects  the  most 
distinguished  State  of  Christendom,  Catholic  ?  Is  not 
Flanders,  the  most  populous  jjart  of  Europe,  also  Cath^ 
olic  ?  Are  the  Catholic  parts  of  Switzerland  and  of  Ger- 
many less  prosperous  than  those  which  are  l^rotestant  ? 
Tenth.  The  next  objection  of  the  honorable  gentle- 
man from  Virginia,  which  I  shall  briefly  notice,  is,  that 
the  manufacturing  system  is  adverse  to  the  genius  of 
our  government,  in  its  tendency  to  the  accumulation  of 
large  capitals  in  a  few  hands  ;  in  the  corruption  of  the 
public  morals,  which  is  alleged  to  be  incident  to  it ;  and 
in  the  consequent  danger  to  the  public  liberty.  The 
first  part  of  the  objection  would  apply  to  every  lucra- 
tive business,  to  commerce,  to  planting,  and  to  the 
learned  professions.     Would  the  gentleman  introduce 


SPEECH  OF  1S24.  303 

the  system  of  Lycurgus  ?  If  his  principle  be  correct, 
it  should  be  extended  to  any  and  every  vocation  which 
had  a  similar  tendency.  The  enormous  fortunes  in  our 
country  —  the  nabobs  of  the  land  —  have  been  chiefly 
made  by  the  profitable  pursuit  of  that  foreign  com- 
merce, in  more  propitious  times,  which  the  honorable 
gentleman  would  so  carefully  cherish.  Immense  es- 
tates have  also  been  made  in  the  South.  The  depen- 
dents are,  perhaps,  not  more  numerous  upon  that  wealth 
which  is  acciimulated  in  manufactures,  than  they  are 
upon  that  which  is  acquired  by  commerce  and  by  agri- 
culture. We  may  safely  confide  in  the  laws  of  distri- 
butions, and  in  the  absence  of  the  rule  of  primogeni- 
ture, for  the  di8si2)ation,  perhaps  too  rai)id,  of  large 
fortunes.  What  has  become  of  those  which  were  held 
two  or  three  generations  back  in  Virginia  ?  Many  of 
the  descendants  of  the  ancient  aristocracy,  as  it  was 
called,  of  that  State,  are  now  in  the  most  indigent  con- 
dition. The  best  security  against  the  demoralization 
of  society  is  the  constant  and  profitable  emijloyment 
of  its  members.  The  greatest  danger  to  public  liberty 
is  from  idleness  and  vice.  If  manufactures  form  cities, 
so  does  commerce.  And  the  disorders  and  violence 
which  proceed  from  the  contagion  of  the  passions  are 
as  frequent  in  one  description  of  those  communities  as 
in  the  other.  There  is  no  doubt  but  that  the  yeomanry 
of  a  country  is  the  safest  depository  of  public  liberty. 
In  all  time  to  come,  and  under  any  probable  direction 
of  the  labor  of  our  population,  the  agricultural  class 
must  be  much  the  most  numerous  and  powerful,  and 
will  ever  retain,  as  it  ought  to  retain,  a  preponderating 
influence  in  our  councils.  The  extent  and  the  fertility 
of  our  lands  constitute  an  adequate  security  against  an 
excess  in  manufactures,  and  also  against  oppression,  on 
the  part  of  capitalists,  towards  the  laboring  portions 
of  the  community. 


304  HENRY  CLAY. 

Eleventh.  The  last  objection  with  a  notice  of  which 
I  shall  trouble  the  committee  is  that  tlie  Constitution 
does  not  authorize  the  passage  of  the  bill.  The  gen- 
tleman from  Virginia  does  not  assert,  indeed,  that  it  is 
inconsistent  with  the  express  provisions  of  that  instru- 
ment, but  he  thinks  it  incompatible  with  the  spirit  of 
the  Constitution.  If  we  attempt  to  provide  for  the  in- 
ternal improvement  of  the  country,  the  Constitution, 
according  to  some  gentlemen,  stands  in  our  way.  If  we 
attempt  to  protect  American  industry  against  foreign 
policy  and  the  rivalry  of  foreign  industry,  the  Constitu- 
tion presents  an  insuperable  obstacle.  This  Constitu- 
tion must  be  a  most  singular  instrument !  It  seems  to 
be  made  for  any  other  people  than  our  own.  Its  action 
is  altogether  foreign.  Congress  has  power  to  lay  du- 
ties and  imposts,  under  no  other  limitation  whatever 
than  that  of  their  being  uniform  throughout  the  United 
States.  But  they  can  only  be  imposed,  according  to 
the  honorable  gentleman,  for  the  sole  purpose  of  reve- 
nue. This  is  a  restriction  which  we  do  not  find  in  the 
Constitution.  No  doubt  revenue  was  a  principal  object 
with  the  framers  of  the  Constitution  in  investing  Con- 
gress with  the  poAver.  But,  in  executing  it,  may  not 
the  duties  and  imposts  be  so  laid  as  to  secure  domestic 
interests  ?  Or  is  Congress  denied  all  discretion  as  to 
the  amount  or  the  distribution  of  the  duties  and  im- 
posts ? 

The  gentleman  from  Virginia  has,  however,  entirely 
mistaken  the  clause  of  the  Constitution  on  which  we 
rely.  It  is  that  which  gives  to  Congress  the  power  to 
regulate  commerce  with  foreign  nations.  The  grant  is 
plenary,  without  any  limitation  whatever,  and  includes 
the  whole  power  of  regulation,  of  which  the  subject  to 
be  regulated  is  susceptible.  It  is  as  full  and  complete 
a  grant  of  the  power,  as  that  is  to  declare  war.  What 
is  a  regulation  of  commerce  ?     It  implies  the  admission 


SPEECH  OF  1824.  305 

or  exclusion  of  the  object  of  it,  and  tlie  terms.  Under 
this  power  some  articles,  by  the  existing  laws,  are  ad- 
mitted freely  ;  others  are  subjected  to  duties  so  high 
as  to  amount  to  their  prohibition,  and  various  rates  of 
duties  are  applied  to  others.  Under  this  power,  laws 
of  total  non-intercourse  with  some  nations,  embargoes 
producing  an  entire  cessation  of  commerce  with  all  for- 
eign countries,  have  been,  from  time  to  time,  passed. 
These  laws,  I  have  no  doubt,  met  with  the  entire  appro- 
bation of  the  gentleman  from  Virginia.  [Mr.  Barbour 
said  that  he  was  not  in  Congress.]  Wherever  the  gen- 
tleman was,  Avhether  on  his  farm  or  in  the  pursuit  of 
that  profession  of  which  he  is  an  ornament,  I  have  no 
doubt  that  he  gave  his  zealous  support  to  the  laws  re- 
ferred to. 

The  principle  of  the  system  under  consideration  has 
the  sanction  of  some  of  the  best  and  wisest  men,  in  all 
ages,  in  foreign  countries  as  well  as  in  our  own,  —  of 
the  Edwards,  of  Henry  the  Great,  of  Elizabeth,  of  the 
Colberts,  abroad;  of  our  Franklin,  Jefferson,  Madison, 
Hamilton,  at  home.  But  it  comes  recommended  to  us 
by  a  higher  authority  than  any  of  these,  illustrious  as 
they  unquestionably  are,  —  by  the  master-spirit  of  the 
age,  that  extraordinary  man  who  has  thrown  the 
Alexanders  and  the  Caesars  infinitely  further  behind 
him  than  they  stood  in  advance  of  the  most  eminent  of 
their  predecessors,  that  singular  man,  who  —  whether 
he  was  seated  on  his  imperial  throne,  deciding  the  fate 
of  nations  and  allotting  kingdoms  to  the  members  of 
his  family  with  the  same  composure,  if  not  with  the 
same  affection,  as  that  with  which  a  Virginia  father 
divides  his  plantations  among  his  children,  or  on  the 
miserable  rock  of  8t.  Helena,  to  which  he  was  con- 
demned by  the  cruelty  and  the  injustice  of  his  unwor- 
thy victors  —  is  equally  an  object  of  the  most  intense 
admiration.     He  appears  to  have  comprehended;  with 


306  HENRY  CLAY. 

the  rapidity  of  intuition,  tlie  tme  interests  of  a  State, 
and  to  have  been  able,  by  the  turn  of  a  single  expres- 
sion, to  develop  the  secret  springs  of  the  policy  of 
cabinets.  AVe  find  that  Las  Casas  reports  him  to  have 
said : 

*'He  opposed  the  principles  of  economists,  'which,'  he 
said,  '  were  correct  in  theory  thongh  erroneous  in  their 
application.  The  political  constitution  of  different 
States,'  continued  he,  '  must  render  these  principles  de- 
fective ;  local  circumstances  continually  call  for  devia- 
tions from  their  uniformity.  Duties,'  he  said,  '  which 
were  so  severely  condemned  by  political  economists, 
should  not,  it  is  true,  be  an  object  to  the  treasury  ;  they 
should  be  the  guaranty  and  protection  of  a  nation,  and 
should  correspond  with  the  nature  and  the  objects  of 
its  trade.  Holland,  which  is  destitute  of  productions 
and  manufactu^res,  and  which  has  a  trade  only  of  tran- 
sit and  commission,  should  be  free  of  all  fetters  and 
barriers.  France,  on  the  contrary,  which  is  rich  in 
every  sort  of  production  and  manufactures,  should  in- 
cessantly guard  against  the  importations  of  a  rival,  who 
might  still  continue  superior  to  her,  and  also  against 
the  cupidity,  egotism,  and  indifference,  of  mere  brokers. 

" '  I  have  not  fallen  into  the  error  of  modern  system- 
atizers,'  said  the  emperor,  '  who  imagine  that  all  the 
wisdom  of  nations  is  centred  in  themselves.  Experience 
is  the  true  wisdom  of  nations.  And  what  does  all  the 
reasoning  of  economists  amount  to  ?  They  incessantly 
extol  the  prosperity  of  England,  and  hold  her  up  as  our 
model ;  but  the  custom-house  system  is  more  burden- 
some and  arbitrary  in  England  than  in  any  other  coun- 
try. They  also  condemn  prohibitions  ;  yet  it  was  Eng- 
land set  the  example  of  prohibitions  ;  and  they  are  in 
fact  necessary  with  regard  to  certain  objects.  Duties 
cannot  adequately  supply  the  place  of  prohibitions  ; 
there  will  always  be  found  means  to  defeat  the  object 


SPEECH  OF  1824.  307 

of  the  legislator.  In  France  we  are  still  very  far  be- 
hind on  these  delicate  points,  which  are  still  unper- 
ceived  or  ill  understood  by  the  mass  of  society.  Yet, 
what  advancement  have  we  not  made  ;  what  correctness 
of  ideas  has  been  introduced  by  my  gradual  classifica- 
tion of  agriculture,  industry,  and  trade  ;  objects  so  dis- 
tinct in  themselves,  and  which  present  so  great  and 
positive  a  graduation  ! 

" '  First.  Agriculture ;  the  soul,  the  first  basis  of  the 
empire. 

'' '  Second.  Industr}^ ;  the  comfort  and  happiness  of 
the  population. 

"  '  Third.  Foreign  trade  ;  the  superabundance,  the 
proper  application  of  the  surplus  of  agriculture  and 
industry. 

"  '  Agriculture  was  continually  improving  during  the 
whole  course  of  the  revolution.  Foreigners  thought  it 
ruined  in  France.  In  1814,  however,  the  English  were 
compelled  to  admit  that  we  had  little  or  nothing  to 
learn  from  them. 

"  '  Industry  or  manufactures,  and  internal  trade,  made 
immense  progress  during  my  reign.  The  application 
of  chemistry  to  the  manufactures  caused  them  to  ad- 
vance with  giant  strides.  I  gave  an  impulse,  the  effects 
of  which  extended  throughout  Europe. 

" '  Foreign  trade,  which,  in  its  results,  is  infinitely  in- 
ferior to  agriculture,  was  an  object  of  subordinate  im- 
portance in  my  mind.  Foreign  trade  is  made  for  agri- 
cultiire  and  home  industry,  and  not  the  two  latter  for 
the  former.  The  interests  of  these  three  fundamental 
cases  are  diverging  and  frequently  conflicting.  I  al- 
ways promoted  them  in  their  natural  gradation,  but  I 
could  not  and  ought  not  to  have  ranked  them  all  on 
an  equality.  Time  Avill  unfold  what  I  have  done,  the 
national  resoui'ces  which  I  created,  and  the  emancipa- 
tion  from    the   English  which  I  brought   about.     We 


308  HENRY  CLAY. 

have  now  the  secret  of  the  commercial  treaty  of  1783. 
France  still  exclaims  against  its  author  ;  but  the  Eng- 
lish demanded  it  on  pain  of  resviming  the  war.  They 
wished  to  do  the  same  after  the  treaty  of  Amiens,  but 
I  was  then  all-powerful ;  I  was  a  hundred  cubits  high, 
I  replied  that  if  they  were  in  possession  of  the  heights 
of  Montniartre  I  would  still  refuse  to  sign  the  treaty. 
These  words  were  echoed  through  Europe, 

" '  The  English  will  now  impose  some  such  treaty  on 
France,  at  least,  if  popular  clamor  and  the  opposition  of 
the  mass  of  the  nation  do  not  force  them  to  draw  back. 
This  thraldom  would  be  an  additional  disgrace  in  the 
eyes  of  that  nation,  which  is  now  beginning  to  acquire 
a  just  perception  of  her  own  interests, 

"  '  When  I  came  to  the  head  of  the  Government,  the 
American  ships,  which  were  permitted  to  enter  our 
ports  on  the  score  of  their  neutrality,  brought  us  raw 
materials,  and  had  the  impudence  to  sail  from  France 
without  freight,  for  the  purpose  of  taking  in  cargoes  of 
English  goods  in  London,  They,  moreover,  had  the 
insolence  to  make  their  j)ayments,  when  they  had  any 
to  make,  by  giving  bills  on  persons  in  London.  Hence 
the  vast  profits  reaped  by  the  English  manufacturers 
and  brokers,  entirely  to  our  prejudicCo  I  made  a  law 
that  no  American  should  import  goods  to  any  amount, 
without  immediately  exporting  their  exact  equivalent. 
A  loud  outcry  was  raised  against  this  ;  it  was  said  that 
I  had  ruined  trade.  But  what  was  the  consequence  ? 
Notwithstanding  the  closing  of  my  ports,  and  in  spite 
of  the  English,  who  ruled  the  seas,  the  Americans  re- 
turned and  submitted  to  my  regulations.  What  might 
I  not  have  done  under  more  favorable  circumstances  ? 

" '  Thus  I  naturalized  in  France  the  manufacture  of 
cotton,  which  includes  :  — 

"  '  First,  spun  cotton.  We  did  not  previously  spin  it 
ourselves ;  the  English  supplied  us  with  it,  as  a  sort  of 
favor. 


SPEECH  OF  1S24.  309 

" '  Secondly,  the  web.  We  did  not  yet  make  it ;  it 
came  to  us  from  abroad. 

"  '  Thirdly,  the  printing.  This  was  the  only  part  of  the 
manufacture  that  we  performed  ourselves.  I  wished  to 
naturalize  the  two  first  branches ;  and  I  proposed  to  the 
Council  of  State  that  their  importation  should  be  pro- 
hibited. This  excited  great  alarm.  I  sent  for  Ober- 
kamp,  and  I  conversed  with  him  a  long  time.  I  learned 
from  him  that  this  prohibition  would  doubtless  produce 
a  shock,  but  that,  after  a  year  or  two  of  perseverance, 
it  would  prove  a  triumph,  whence  we  should  derive  im- 
mense advantages.  Then  I  issued  my  decree  in  spite  of 
all ;  this  was  a  true  piece  of  statesmanship. 

"  '  I  at  first  confined  myself  merely  to  prohibiting  the 
web ;  then  I  extended  the  prohibition  to  spun  cotton  ; 
and  we  now  possess,  Avithin  ourselves,  the  three  branches 
of  the  cotton  manufacture,  to  the  great  benefit  of  our 
population,  and  the  injury  and  regret  of  the  English, 
which  proves  that,  in  civil  government,  as  well  as  in 
war,  decision  of  character  is  often  indispensable  to  suc- 
cess.' " 

I  will  trouble  the  Committee  with  only  one  other 
quotation,  which  I  shall  make  from  Lowe  ;  and  from 
hearing  which  the  Committee  must  share  with  me  in 
the  mortification  which  I  felt  on  perusing  it.  That  au- 
thor says  :  "  It  is  now  above  forty  years  since  the 
United  States  of  America  were  definitely  separated 
from  us,  and  since,  their  situation  has  afforded  a  proof 
that  the  benefit  of  mercantile  intercoiirse  may  be  re- 
tained, in  all  its  extent,  without  the  care  of  governing, 
or  the  expense  of  defending  these  once  regretted  prov- 
inces." Is  there  not  too  much  truth  in  this  observa- 
tion ?  By  adhering  to  the  foreign  policy  which  I  have 
been  discussing,  do  we  not  remain  essentially  British, 
in  everything  but  the  form  of  our  government  ?  Are 
not  our  interests,  our  industry,  our  commerce,  so  modi- 


310  HENRY  CLAY. 

fied  as  to  swell  British  pride,  and  to  increase  British 
power  ? 

Mr.  Chairman,  our  confederacy  comprehends  within 
its  vast  limits  great  diversity  of  interests  :  agricidtural, 
planting,  farming,  commercial,  navigating,  fishing,  man- 
ufacturing. No  one  of  these  interests  is  felt  in  the 
same  degree  and  cherished  with  the  same  solicitude 
throughout  all  parts  of  the  Union.  Some  of  them  are 
peculiar  to  particular  sections  of  our  common  country. 
But  all  these  great  interests  are  confided  to  the  protec- 
tion of  one  Government,  —  to  the  fate  of  one  ship  ;  and 
a  most  gallant  ship  it  is,  with  a  noble  crew.  If  we  pros- 
per and  are  happy,  protection  must  be  extended  to  all ; 
it  is  due  to  all.  It  is  the  great  principle  on  which  obe- 
dience is  demanded  from  all.  If  our  essential  interests 
cannot  find  protection  from  our  own  Government  against 
the  policy  of  foreign  powers,  where  are  they  to  get  it  ? 
We  did  not  unite  for  sacrifice,  but  for  preservation. 
The  inquiry  should  be,  in  reference  to  the  great  inter- 
ests of  every  section  of  the  Union  (I  speak  not  of 
minute  subdivisions),  what  would  be  done  for  those  in- 
terests if  that  section  stood  alone  and  separated  from 
the  residue  of  the  republic  ?  If  the  promotion  of  those 
interests  would  not  injuriously  affect  any  other  section, 
then  everything  should  be  done  for  them  which  would 
be  done  if  it  formed  a  distinct  Government.  If  they 
come  into  absolute  collision  with  the  interests  of  another 
section,  a  reconciliation,  if  passible,  should  be  attempted 
by  mutual  concession,  so  as  to  avoid  a  sacrifice  of  the 
prosperity  of  either  to  that  of  the  other.  In  such  a  case 
all  should  not  be  done  for  one  which  would  be  done,  if 
it  were  separated  and  independent,  but  something ;  and 
in  devising  tho  measure  the  good  of  each  part  and  of 
the  whole  should  be  carefully  consulted.  This  is  the 
only  mode  by  which  we  can  preserve,  in  full  vigor,  tho 
harmony  of   the  whole  Union.     The  South  entei tains 


SPEECH  OF  1824.  311 

one  opinion,  and  imagines  that  a  modification  of  the  ex- 
isting policy  of  the  country  for  the  protection  of  Amer- 
ican industry  involves  the  ruin  of  the  South.  The 
North,  the  East,  the  West  hold  the  opposite  opinion, 
and  feel  and  contemplate,  in  a  longer  adherence  to  the 
foreign  policy  as  it  now  exists,  their  utter  destruction. 
Is  it  true  that  the  interests  of  these  great  sections  of 
our  country  are  irreconcilable  with  each  other  ?  Are 
.we  reduced  to  the  sad  and  afflicting  dilemma  of  deter- 
mining which  shall  fall  a  victim  to  the  prosperity  of  the 
other  ?  Happily,  I  think,  there  is  no  such  distressing 
alternative.  If  the  North,  the  West,  and  the  East 
formed  an  independent  State,  unassociated  with  the 
South,  can  there  be  a  doubt  that  the  restrictive  system 
would  be  carried  to  the  point  of  prohibition  of  every 
foreign  fabric  of  which  they  produce  the  raw  material, 
and  which  they  could  manufacture  ?  Such  would  be 
their  policy,  if  they  stood  alone  ;  but  they  are  fortu- 
nately connected  with  the  South,  which  believes  its  in- 
terests to  require  a  free  admission  of  foreign  manufac- 
tures. Here,  then,  is  a  case  for  mutual  concession,  for 
fair  compromise.  The  bill  under  consideration  presents 
this  compromise.  It  is  a  medium  between  the  absolute 
exclusion  and  the  unrestricted  admission  of  the  produce 
of  foreign  industry.  It  sacrifices  the  interest  of  neither 
section  to  that  of  the  other ;  neither,  it  is  true,  gets  all 
that  it  wants,  nor  is  subject  to  all  that  it  fears.  But  it 
has  been  said  that  the  South  obtains  nothing  in  this 
compromise.  Does  it  lose  anything  ?  is  the  first  ques- 
tion. I  have  endeavored  to  prove  that  it  does  not,  by 
showing  that  a  mere  transfer  is  effected  in  the  source  of 
the  supply  of  its  consumption  from  Europe  to  America ; 
and  that  the  loss,  whatever  it  may  be,  of  the  sale  of 
its  great  staple  in  Europe  is  compensated  by  the  new 
market  created  in  America.  But  does  the  South  really 
gain  nothing  in  this  compromise  ?      The  consumption 


312  HENRY  CLAY. 

of  the  other  sections,  though  somewhat  restricted,  is 
still  left  ()])en  by  this  bill,  to  foreign  fabrics  purchased 
by  Southern  staples.  So  far  its  operation  is  beneficial 
to  the  South,  and  prejixdicial  to  the  industry  of  the  other 
sections,  and  that  is  the  point  of  mutual  concession. 
The  South  will  also  gain  by  the  extended  consumption 
of  its  great  staple,  produced  by  an  increased  capacity 
to  consume  it  in  consequence  of  the  establishment  of 
the  home  market.  But  the  South  cannot  exert  its  in- 
dustry and  enterprise  in  the  business  of  manufactures  ! 
Why  not  ?  The  difficulties,  if  not  exaggerated,  are 
artificial,  and  may  therefore  be  surmounted.  But  can 
the  other  sections  embark  in  the  planting  occupations 
of  the  South  ?  The  obstructions  which  forbid  them 
are  natural,  created  by  the  immutable  laws  of  God,  and 
therefore  unconquerable. 

Other  and  animating  considerations  invite  us  to  adopt 
the  policy  of  this  system.  Its  importance,  in  connec- 
tion with  the  general  defense  in  time  of  war,  cannot 
fail  to  be  duly  estimated.  Need  I  recall  to  our  painful 
recollection  the  sufferings,  for  the  want  of  an  adequate 
supply  of  absolute  necessaries,  to  which  the  defenders 
of  their  country's  rights  and  our  entire  popu.lation 
were  subjected  during  the  late  war  ?  Or  to  remind  the 
Committee  of  the  great  advantage  of  a  steady  and  un- 
failing source  of  supply,  unaffected  alike  in  war  and  in 
peace  ?  Its  importance,  in  reference  to  the  stability  of 
our  Union,  that  paramount  and  greatest  of  all  our  inter- 
ests, cannot  fail  warmly  to  recommend  it,  or  at  least 
to  conciliate  the  forbearance  of  every  patriot  bosom. 
Now  our  people  present  the  spectacle  of  a  vast  assem- 
blage of  jealous  rivals,  all  eagerly  rushing  to  the  sea- 
board, jostling  each  other  in  their  way,  to  hurry  off  to 
ghitted  foreign  markets  the  perishable  produce  of  their 
labor.  The  tendency  of  that  policy,  in  conformity  to 
which  this  bill  is  prepared,  is  to  transform  these  com- 


SPEECH  OF  1824.  31S 

petitors  into  friends  and  mutual  customers  ;  and,  by  the 
reciprocal  exchanges  of  their  respective  productions,  to 
place  the  confederacy  upon  the  most  solid  of  all  founda- 
tions, the  basis  of  cominon  interest.  And  is  not  Gov- 
ernment called  upon,  by  every  stimulating  motive,  to 
adapt  its  policy  to  the  actual  condition  and  extended 
growth  of  our  great  republic  ?  At  the  commencement 
of  our  Constitution,  almost  the  whole  population  of  the 
United  States  was  confined  between  the  Alleghany 
mountains  and  the  Atlantic  ocean.  Since  that  epoch, 
the  western  part  of  New  York,  of  Pennsylvania,  of 
Virginia,  all  the  Western  States  and  Territories  have 
been  principally  peopled.  Prior  to  that  period  we  had 
scarcely  any  interior.  An  interior  has  sprung  up,  as  it 
were  by  enchantment,  and  along  with  it  new  interests 
and  new  relations,  requiring  the  parental  protection  of 
Government.  Our  policy  should  be  modified  accord- 
ingly, so  as  to  comprehend  all,  and  sacrifice  none.  And 
are  we  not  encouraged  by  the  success  of  past  experience, 
in  respect  to  the  only  article  which  has  been  adequately 
protected  ?  Already  have  the  predictions  of  the  friends 
of  the  American  system,  in  even  a  shorter  time  than 
their  most  sanguine  hopes  could  have  anticipated,  been 
completely  realized  in  regard  to  that  article ;  and  con- 
sumption is  now  better  and  more  clieaply  supplied  with 
coarse  cottons  than  it  was  under  the  prevalence  of  the 
foreign  system. 

Even  if  the  benefits  of  the  policy  were  limited  to 
certain  sections  of  our  country,  would  it  not  be  satis- 
factory to  behold  American  industry,  wherever  situated, 
active,  animated,  and  thrifty,  rather  than  persevere  in  a 
course  which  renders  us  subservient  to  foreign  indus- 
try ?  But  these  benefits  are  two-fold,  direct  and  collat- 
eral, and  in  the  one  shape  or  the  other  they  will  diffuse 
themselves  throughout  the  Union.  All  parts  of  the 
Union  will  participate,  moi-e  or  less,  in  both.     As  to  the 


814  HENRY  CLAY. 

direct  benefit,,  it  is  probable  that  the  North  and  the 
J'^.ast  will  enjoy  the  largest  share.  But  the  West  and 
the  South  will  also  participate  in  them.  Philadelphia, 
J^)altimor(',  and  Eichmond  will  divide  with  the  Northern 
capitals  the  Imsiness  of  manufacturing.  The  latter  city 
unites  more  advantages  for  its  successful  prosecution 
than  any  other  place  I  know,  Zanesville  in  Ohio  only 
excepted.  And  where  the  direct  benefit  does  not  ac- 
crue, that  will  be  enjoyed  of  supplying  the  raw  mate- 
rial and  provisions  for  the  consumption  of  artisans.  Is 
it  not  most  desirable  to  put  at  rest  and  prevent  the  an- 
nual recurrence  of  this  unpleasant  subject,  so  well  fitted, 
by  the  various  interests  to  which  it  appeals,  to  excite 
irritation  and  to  produce  discontent  ?  Can  that  be 
effected  by  its  rejection  ?  Behold  the  mass  of  petitions 
which  lie  on  our  table,  earnestly  and  anxiously  entreat- 
ing the  protecting  interposition  of  Congress  against  the 
ruinous  policy  which  we  are  pursuing.  Will  these  peti- 
tioners, comprehending  all  orders  of  society,  entire 
States  and  communities,  public  companies  and  private 
individuals,  spontaneously  assembling,  cease  in  their 
humble  prayers  by  your  lending  a  deaf  ear  ?  Can  j^ou 
expect  that  these  petitioners  and  others,  in  countless 
numbers,  that  will,  if  you  delay  the  passage  of  this  bill, 
supplicate  your  mercy,  should  contemplate  their  sub- 
stance gradually  Avithdrawn  to  foreign  countries,  their 
ruin,  slow  but  certain  and  as  inevitable  as  death  itself, 
without  one  expiring  effort  ?  Yoix  think  the  measure 
injurious  to  you ;  we  believe  our  preservation  depends 
upon  its  adoption.  Our  convictions,  mutually  honest, 
are  equally  strong.  What  is  to  be  done  ?  I  invoke 
that  saving  spirit  of  mutual  concession  under  which  our 
blessed  Constitution  was  formed,  and  under  which  alone 
it  can  be  hapi)ily  administered.  I  appeal  to  the  South 
—  to  the  high-minded,  generous,  and  patriotic  South  — 
with  which  I  have  so  often  cooperated,  in  attempting  to 


SPEECH  OF  1S24.  315 

sustain  the  honor  and  to  vindicate  the  rights  of  our 
country.  Shoukl  it  not  offer,  upon  the  altar  of  the 
public  good,  some  sacrifice  of  its  peculiar  opinions  ?  Of 
what  does  it  complain  ?  A  possible  temporary  enhance- 
ment in  the  objects  of  consumption.  Of  what  do  we 
complain  ?  A  total  incapacity,  produced  by  the  for- 
eign policy,  to  purchase,  at  any  price,  necessary  foreign 
objects  of  consumption.  In  such  an  alternative,  incon- 
venient only  to  it,  ruinous  to  us,  can  we  expect  too 
much  from  Southern  magnanimity  ?  The  just  and  con- 
fident expectation  of  the  passage  of  this  bill  has  ilooded 
the  country  with  recent  importations  of  foreign  fabrics. 
If  it  should  not  pass,  they  will  complete  the  work  of 
destruction  of  our  domestic  industry.  If  it  should  pass, 
they  will  prevent  any  considerable  rise  in  the  price  of 
foreign  commodities,  until  our  own  industry  shall  be 
able  to  supply  competent  substitutes. 

To  the  friends  of  the  tariff  I  would  also  anxiously 
appeal.  Every  arrangement  of  its  provisions  does  not 
suit  each  of  you  ;  you  desire  some  further  alterations  ; 
you  would  make  it  perfect.  You  want  what  you  will 
never  get.  Nothing  human  is  perfect.  And  I  have 
seen,  with  great  surprise,  a  piece  signed  by  a  member  of 
Congress,  published  in  the  "  National  Intelligencer," 
stating  that  this  bill  must  be  rejected,  and  a  judicious 
tariff  brought  in  as  its  substitute.  A  judicious  tariff ! 
No  member  of  Congress  could  have  signed  that  piece  ; 
or,  if  he  did,  the  i)ublic  ought  not  to  be  deceived.  If 
this  bill  do  not  pass,  unquestionably  no  other  can  pass 
at  this  session,  or  i)robably  during  this  Congress.  And 
who  will  go  home  and  say  that  he  rejected  all  the  bene- 
fits of  this  bill,  because  molasses  has  been  subjected  to 
the  enormous  additional  duty  of  five  cents  per  gallon  ? 
I  call,  therefore,  upon  the  friends  of  the  American 
policy  to  yield  somewhat  of  their  own  peculiar  wishes, 
and  not  reject  the  practicable  in  the  idle  pursuit  after 


316  UENRY  CLAY. 

tlie  luiattaiuable.  Let  us  imitate  the  illustrious  exam- 
ple of  the  framers  of  the  Constitution,  and,  always,  re- 
membering that  whatever  springs  from  man  partakes  of 
his  imperfections,  depend  upon  experience  to  suggest, 
in  future,  the  necessary  amendments. 

We  have  had  great  dilhculties  to  encounter.  First, 
the  splendid  talents  which  are  arrayed  in  this  house 
against  us.  Second,  we  are  opposed  by  the  rich  and 
powerful  in  the  land.  Third,  the  executive  Govern- 
ment, if  any,  affords  us  but  a  cold  and  equivocal  svipport. 
Fourth,  the  importing  and  navigating  interest,  I  verily 
believe  from  misconception,  are  adverse  to  us.  Fifth, 
the  British  factors  and  the  British  influence  are  inimical 
to  our  success.  Sixth,  long-established  habits  and  pre- 
judices oppose  us.  Seventh,  the  reviewers  and  literary 
speculators,  foreign  and  domestic.  And,  lastly,  the 
leading  presses  of  the  country,  including  the  influence 
of  that  which  is  established  in  this  city  and  sustained 
by  the  public  purse. 

From  some  of  these,  or  other  causes,  the  bill  may 
be  postponed,  thwarted,  defeated.  But  the  cause  is 
the  cause* of  the  country,  and  it  must  and  will  prevail. 
It  is  founded  in  the  interests  and  affections  of  the  peo- 
ple. It  is  as  native  as  the  granite  dee})ly  imbosomed  in 
our  mountains.  And,  in  conclusion,  I  would  pray  God, 
in  his  infinite  mercy,  to  avert  from  our  country  the 
evils  which  are  impending  over  it,  and,  by  enlightening 
our  councils,  to  conduct  us  into  that  path  which  leads 
to  riches,  to  greatness,  to  glory. 


SPEECH    OF    DANIEL    WEBSTER    UPON    THE 

TARIFF, 

IN    THE    HOUSE  OF  REPRESENTATIVES,  APRIL  1  and  2, 

1824. 

Mr.  Chairman,  —  I  will  avail  myself  of  the  present 
occasion  to  make  some  remarks  on  certain  principles 
and  opinions  which  have  been  recently  advanced,  and 
on  those  considerations  which,  in  my  judgment,  ought 
to  govern  us  in  deciding  upon  the  several  and  respective 
parts  of  this  very  important  and  complex  measure.  I 
can  truly  say  that  this  is  a  painful  duty.  I  deeply  re- 
gret the  necessity,  which  is  likely  to  be  imposed  upon 
me,  of  giving  a  general  affirmative  or  negative  vote  on 
the  whole  of  the  bill.  I  cannot  but  think  this  mode  of 
proceeding  liable  to  great  objections.  It  exposes  both 
those  who  support  and  those  who  oppose  the  measure 
to  very  unjust  and  injurious  misapprehensions.  There 
may  be  good  reasons  for  favoring  some  of  the  provisions 
of  the  bill,  and  equally  strong  reasons  for  opposing  oth- 
ers ;  and  these  provisions  do  not  stand  to  each  other  in 
the  relation  of  principal  and  incident.  If  that  were  the 
case,  those  who  are  in  favor  of  the  principal  might  forego 
their  opinions  upon  incidental  and  subordinate  provi- 
sions. But  the  bill  proposes  enactments  entirely  distinct, 
and  different  from  one  another  in  character  and  tendency. 
Some  of  its  clauses  are  intended  merely  for  revenue ; 
and,  of  those  which  regard  the  protection  of  home  manu- 
factures, one  part  stands  upon  very  different  grounds 
from  those  of  other  parts.  So  that  probably  every  gen- 
tleman who  may  ultimately  support  the  bill  will  vote 


318  DANIEL  WEBSTER. 

for  much  which  his  judgment  does  not  approve ;  and 
those  who  oppose  it  will  oppose  something  which  they 
would  very  gladly  support. 

Being  intrusted  with  the  interests  of  a  district  highly 
commercial,  and  deeply  interested  in  manufactures  also, 
I  wish  to  state  my  opinions  on  the  present  measure; 
not  as  on  a  whole,  for  it  has  no  entire  and  homogeneous 
character ;  but  as  on  a  collection  of  different  enactments, 
some  of  which  meet  my  approbation  and  some  of  which 
do  not. 

And  allow  me,  sir,  in  the  first  place,  to  state  my  re- 
gret, if  indeed  I  ought  not  to  express  a  warmer  senti- 
ment, at  the  names,  or  designations,  which  Mr.  Speaker 
has  seen  fit  to  adopt,  for  the  purpose  of  describing  the 
advocates  and  the  opposers  of  the  present  bill.  It  is  a 
question,  he  says,  between  the  friends  of  an  "  American 
policy,"  and  those  of  a  "foreign  policy."  This,  sir,  is 
an  assumption  which  I  take  the  liberty  most  directly  to 
deny.  Mr.  Speaker  certainly  intended  nothing  invidi- 
ous or  derogatory  to  any  part  of  the  House  by  this  mode 
of  denominating  friends  and  enemies.  But  there  is 
power  in  names,  and  this  manner  of  distinguishing  those 
who  favor  and  those  who  oppose  particular  measures 
may  lead  to  inferences  to  Avhich  no  member  of  the  House 
can  submit.  It  may  imply  that  there  is  a  more  exclu- 
sive and  peculiar  regard  to  American  interests  in  one 
class  of  opinions  than  in  another.  Such  an  implication 
is  to  be  resisted  and  repelled.  Every  member  has  a 
right  to  the  presumption  that  he  pursues  what  he  be- 
lieves to  be  the  interest  of  his  country  with  as  sincere  a 
zeal  as  any  other  member.  I  claim  this  in  my  own 
case  ;  and,  while  I  shall  not,  for  any  purpose  of  descrip- 
tion or  convenient  arrangement,  use  terms  which  may 
imply  any  disrespect  to  other  men's  opinions,  much  less 
any  imputations  of  other  men's  motives,  it  is  my  duty 
to  take  care  that  the  use  of  such  terms  by  others  be  not, 


SPEECH  OF  1824.  319 

against  the  will  of  those  who  adopt  them,  made  to  pro- 
duce a  false  impression.  Indeed,  sir,  it  is  a  little  aston- 
ishing, if  it  seemed  convenient  to  Mr.  Speaker,  for  the 
purposes  of  distinction,  to  make  use  of  the  terms 
"American  policy  "  and  "foreign  policy,"  that  he  should 
not  have  applied  them  in  a  manner  precisely  the  reverse 
of  that  in  which  he  has  in  fact  used  them.  If  names 
are  thought  necessary,  it  would  be  well  enough,  one 
would  think,  that  the  name  should  be  in  some  measure 
descriptive  of  the  thing ;  and  since  Mr.  Speaker  denom- 
inates the  policy  which  he  recommends  "  a  new  policy 
in  this  country  ;  "  since  he  speaks  of  the  present  mea- 
sure as  a  new  era  in  our  legislation ;  since  he  professes 
to  invite  us  to  depart  from  onr  accustomed  course,  to 
instinict  ourselves  by  the  wisdom  of  others,  and  to  adopt 
the  policy  of  the  most  distinguished  foreign  states,  one 
is  a  little  curious  to  know  with  what  propriety  of  speech 
this  imitation  of  other  nations  is  denominated  an 
"  American  policy,"  while,  on  the  contrary,  a  preference 
for  our  own  established  system,  as  it  now  actually  ex- 
ists, and  always  has  existed,  is  called  a  "  foreign  policy." 
This  favorite  American  policy  is  what  America  has 
never  tried,  and  this  odious  foreign  policy  is  what,  as 
we  are  told,  foreign  states  have  never  pursued.  Sir, 
that  is  the  truest  American  policy  which  shall  most  use- 
fully employ  American  capital,  and  American  labor,  and 
best  sustain  the  whole  population.  With  me  it  is  a 
fundamental  axiom,  it  is  interwoven  with  all  my  opin- 
ions, that  the  great  interests  of  the  country  are  united 
and  inseparable  ;  that  agriculture,  commerce,  and  manu- 
factures will  prosper  together,  or  languish  together ; 
and  that  all  legislation  is  dangerous  which  proposes  to 
benefit  one  of  these  without  looking  to  consequences 
which  may  fall  on  the  others. 

Passing  from  this,  sir,  I  am  bound  to  say  that  Mr. 
Speaker  began  his  able  and  impressive  speech  at  the 


320  DANIEL  WEBSTER. 

j)roper  point  of  inquiry  ;  I  mean  the  present  state  and 
condition  of  the  country  ;  although  I  am  so  unfortunate, 
or  rather  although  I  am  so  happy,  as  to  differ  from  him 
very  widely  in  regard  to  that  condition.  I  dissent  en- 
tirely from  the  justice  of  that  picture  of  distress  which 
he  has  drawn.  I  have  not  seen  the  reality,  and  know 
not  where  it  exists.  Within  my  observation  there  is 
no  cause  for  so  gloomy  and  terrifying  a  representa- 
tion. In  respect  to  the  New  England  States,  with  the 
condition  of  which  I  am,  of  course,  most  acquainted, 
the  present  appears  to  me  a  period  of  very  general 
prosperity.  Not,  indeed,  a  time  for  great  profits  and 
sudden  ac(pusition  ;  not  a  day  of  extraordinary  activity 
and  successful  speculation.  There  is,  no  doubt,  a  consid- 
erable depression  of  prices,  and  in  some  degree  a  stagna- 
tion of  business.  But  the  case  presented  by  Mr.  Speaker 
was  not  one  of  depression,  but  of  distress  ;  of  universal, 
pervading,  intense  distress,  limited  to  no  class,  and  to 
no  place.  We  are  represented  as  on  the  very  verge  and 
brink  of  national  ruin.  So  far  from  acquiescing  in 
these  opinions,  I  believe  there  has  been  no  period  in 
which  the  general  prosperity  was  better  secured,  or 
rested  on  a  more  solid  foundation.  As  applicable  to  the 
eastern  States,  I  put  this  remark  to  their  Representa- 
tives, and  ask  them  if  it  is  not  true.  When  has  there 
been  a  time  in  which  the  means  of  living  have  been 
more  accessible  and  more  abundant  ?  when  has  labor 
been  rewarded,  I  do  not  say  with  a  larger,  but  with  a 
more  certain  success  ?  Profits,  indeed,  are  low ;  in 
some  pursuits  of  life,  which  it  is  not  proposed  to  benefit, 
but  to  burden  by  this  bill,  very  low.  But  still  I  am 
unacquainted  with  any  proofs  of  extraordinary  distress. 
What,  indeed,  are  the  general  indications  of  the  state 
of  the  country  ?  There  is  no  famine  nor  pestilence  in 
the  land,  nor  war,  nor  desolation.  There  is  no  writhing 
under  the  burden  of  taxation.     The  means  of  subsist- 


SPEECH  OF  1824.  321 

ence  are  abundant ;  and  at  the  very  moment  when  the 
miserable  condition  of  the  country  is  asserted,  it  is  ad- 
mitted that  the  wages  of  labor  are  high  in  comparison 
with  those  of  any  other  country.  A  country,  then,  en- 
joying a  profound  peace,  a  perfect  civil  liberty,  with 
the  means  of  subsistence  cheap  and  abundant,  with  the 
reward  of  labor  sure,  and  its  wages  higher  than  any- 
where else,  cannot  be  represented  in  gloom,  melancholy, 
and  distress,  but  by  the  effort  of  extraordinary  powers 
of  tragedy. 

Even,  if,  in  judging  of  this  question,  we  were  to  re- 
gard only  those  proofs  to  which  we  have  been  referred, 
we  shall  probably  come  to  a  conclusion  somewhat  dif- 
ferent from  that  which  has  been  drawn.  Our  exports, 
for  example,  although  certainly  less  than  in  some  years, 
were  not,  last  year,  so  much  below  an  average,  formed 
upon  the  exports  of  a  series  of  years,  and  putting  those 
exports  at  a  fixed  value,  as  might  be  supposed.  The 
exports  of  agricultural  products,  of  animals,  of  the  pro- 
ducts of  the  forest,  of  the  sea,  together  with  gunpowder, 
spirits,  and  sundry  unenumerated  articles,  amounted  in 
the  several  years  to  the  following  sums,  viz  :  — 

In  1790 $27,716,152 

In  1804 33,842,316 

In  1807 38,465,854 

Coming  up,  now,  to  our  own  times,  and  taking  the 
exports  of  the  years  1821,  1822,  and  1823,  of  the  same 
articles  and  products,  at  the  same  prices,  they  stand 
thus :  — 

In  1821 $45,643,175 

In  1822 48,782,295 

In  1823 55,863,491 

Mr.  Speaker  has  taken  the  very  extraordinary  year  of 
1803,  and  addiug  to  the  exi)ortation  of  that  year  what 
he  thinks  ought  to  have  been  a  just  augmentation,  in 


322  DANIEL  WEBSTER. 

])roportion  to  the  increase  of  our  po}mlation,  he  swells 
the  result  to  a  magnitude  which,  when  compared  with 
our  actual  exports,  would  exhibit  a  great  deficiency. 
But  is  there  any  justice  in  this  mode  of  calculation  ? 
In  the  first  place,  as  before  observed,  the  year  1803  was 
a  year  of  extraordinary  exportation.  By  reference  to 
the  accounts,  that  of  the  article  of  flour,  for  example, 
there  was  an  export  that  year  of  1,300,000  barrels  ;  but 
the  very  next  year  it  fell  to  800,000,  and  the  next  year 
to  700,000.  In  the  next  place,  there  never  was  any  rea- 
son to  expect  that  the  increase  of  our  exports  of  agri- 
cultural products  would  keep  pace  with  the  increase  of 
our  population.  That  would  be  against  all  experience. 
It  is,  indeed,  most  desirable  that  there  should  be  an 
augmented  demand  for  the  products  of  agriculture  ;  but, 
nevertheless,  the  official  returns  of  onr  exports  do  not 
show  that  absolute  want  of  all  foreign  market  which 
has  been  so  strongly  stated. 

But  there  are  other  means  by  which  to  judge  of  the 
general  condition  of  the  people.  The  quantity  of  the 
means  of  subsistence  consumed;  or,  to  make  use  of  a 
phraseology  better  suited  to  the  condition  of  our  own 
people,  the  quantity  of  the  comforts  of  life  enjoyed, 
is  one  of  those  means.  It  so  happens,  indeed,  that  it  is 
not  so  easy  in  this  country,  as  elsewhere,  to  ascertain 
facts  of  this  sort  with  accuracy.  Where  most  of  the 
articles  of  subsistence,  and  most  of  the  comforts  of  life 
are  taxed,  there  is,  of  course,  great  facility  in  ascer- 
taining, from  official  statements,  the  amount  of  con- 
sumj^tion.  But  in  this  country,  most  fortunately,  the 
government  neither  knows,  nor  is  concerned  to  know, 
the  annual  consumption;  and  estimates  can  only  be 
formed  in  another  mode,  and  in  reference  only  in  a  few 
articles.  Of  these  articles,  tea  is  one.  Its  use  is  not 
quite  a  luxury,  and  yet  is  something  above  the  absolute 
necessaries  of  life.     Its  consumption,  therefore,  will  be 


SPEECH  OF  1824.  323 

diminished  in  times  of  adversity,  and  augmented  in 
times  of  prosperity.  By  deducting  the  annual  export 
from  the  annual  import,  and  taking  a  number  of  years 
together,  we  may  arrive  at  a  probable  estimate  of  eon- 
sumption.  The  average  of  eleven  years,  from  1790  to 
1800  inclusive,  will  be  found  to  be  2,500,000  pounds. 
From  1801  to  1812,  inclusive,  3,700,000;  and  the  aver- 
age of  the  last  three  years,  to  wit :  1821,  1822,  and  1823, 
5,500,000.  Having  made  a  just  allowance  for  the  in- 
crease in  our  numbers,  we  shall  still  find,  I  think,  from 
these  statements,  that  there  is  no  distress  which  has 
limited  our  means  of  subsistence  and  enjoyment. 

In  forming  an  opinion  of  the  degree  of  general  pros- 
perity, we  may  regard  likewise  the  progress  of  internal 
improvements,  —  the  investment  of  capital  in  roads, 
bridges,  and  canals.  All  these  prove  a  balance  of  in- 
come over  expenditure  ;  they  are  evidence  that  there  is 
a  surplus  of  profits  which  the  present  genei'ation  is  use- 
fully vesting  for  the  benefit  of  the  next.  It  cannot  be 
denied  that,  in  this  particular,  the  progress  of  the  coun- 
try is  steady  and  rapid. 

We  may  look,  too,  to  the  expenses  of  education.  Are 
our  colleges  deserted  ?  Do  fathers  find  themselves  less 
able  than  usual  to  educate  their  children  ?  It  will  be 
found,  I  imagine,  that  the  amount  paid  for  the  pur- 
l)Ose  of  education  is  constantly  increasing,  and  that  the 
schools  and  colleges  were  never  more  full  than  at  the 
present  moment.  I  may  add  that  the  endowment  of 
public  charities,  the  contributions  to  objects  of  general 
benevolence,  whether  foreign  or  domestic,  the  munifi- 
cence of  individuals  towards  whatever  promises  to 
benefit  the  community,  are  all  so  many  proofs  of  na- 
tional prosperity.  And,  finally,  there  is  no  defalcation 
of  revenue,  no  pressure  of  taxation. 

The  general  result,  therefore,  of  a  fair  examination 
of  the  present  condition  of  things,  seems  to  me  to  be 


324  DANIEL  WEBSTER. 

that  there  is  a  considerable  depression  of  prices  and 
curtailment  of  profit ;  and,  in  some  parts  of  the  country, 
it  must  be  admitted,  there  is  a  great  degree  of  pecuniary 
embarrassment  arising  from  the  difficulty  of  paying 
debts  which  were  contracted  when  prices  were  high. 
With  these  qualifications,  the  general  state  of  the  coun- 
try may  be  said  to  be  prosperous  ;  and  these  are  not 
sufficient  to  give  to  the  whole  face  of  affairs  auy  appear- 
ance of  general  distress. 

Supposing  the  evil,  then,  to  be  a  depression  of  prices, 
and  a  partial  pecuniary  pressure,  the  next  incpiiry  is 
into  the  causes  of  that  evil ;  and  it  a})pears  to  me  that 
there  are  several,  —  and  in  this  respect,  I  think,  too 
much  has  been  imputed,  by  Mr.  Speaker,  to  the  single 
cause  of  the  diminution  of  exports.  Connected,  as  we 
are,  with  all  the  commercial  nations  of  the  world,  and 
having  observed  great  changes  to  take  place  elsewhere, 
we  should  consider  wliether  the  causes  of  those  changes 
have  not  reached  us,  and  whether  we  are  not  suffering 
by  the  operation  of  them  in  common  with  others.  Un- 
doubtedly there  has  been  a  great  fall  in  the  })rice  of  all 
commodities  throughout  the  commercial  world  in  conse- 
quence of  the  restoration  of  a  state  of  peace.  When 
the  Allies  entered  France  in  1814,  prices  rose  astonish- 
ingly fast,  and  very  high.  Colonial  produce,  for  in- 
stance, in  the  ports  of  this  country,  as  well  as  elsewhere, 
sprung  up  suddenly  from  the  lowest  to  the  highest  ex- 
treme. A  new  and  vast  demand  was  created  for  the 
commodities  of  trade.  These  were  the  natural  conse- 
quences of  the  great  political  changes  which  then  took 
place  in  Europe. 

We  are  to  consider,  too,  that  our  own  war  created 
new  demand,  and  that  a  government  expenditure  of 
$25,000,000  or  $30,000,000  a  year  had  the  usual  effect 
of  enhancing  prices.  We  are  obliged  to  add  that  the 
paper  issues  of  our  banks  carried  the  same  effect  still 


SPEECH  OF  1824.  325 

further.  A  depreciated  currency  existed  in  a  great  part 
of  the  country  ;  depreciated  to  such  an  extent  as  that, 
at  one  time,  exchange  between  the  centre  and  the  north 
was  as  high  as  20%.  The  Bank  of  the  United  States 
was  instituted  to  correct  this  evil ;  but,  for  causes  which 
it  is  not  necessary  now  to  enumerate,  it  did  not  for  some 
years  bring  back  the  currency  of  the  country  to  a  sound 
state.  This  depreciation  of  the  circulating  currency 
was  so  much,  of  course,  added  to  the  nominal  prices  of 
commodities,  and  these  prices  thus  unnaturally  high, 
seemed,  to  those  who  looked  only  at  the  appearance,  to 
indicate  great  prosperity.  But  such  prosperity  is  more 
specious  than  real.  It  would  have  been  better,  prob- 
ably, as  the  shock  would  have  been  less,  if  prices  had 
fallen  sooner.  At  length,  however,  they  fell ;  and,  as 
there  is  little  doubt  that  certain  events  in  Europe  had 
an  influence  in  determining  the  time  at  which  this  fall 
should  take  place,  I  will  advert  shortly  to  some  of  the 
principal  of  those  events. 

In  May,  1819,  the  British  House  of  Commons  decided, 
by  an  unanimous  vote,  that  the  resumption  of  cash  pay- 
ments by  the  l^ank  of  England  should  not  be  deferred 
beyond  the  ensuing  February.  The  restriction  had 
been  continued  from  time  to  time  and  from  year  to 
year.  Parliament  always  professing  to  look  to  the  resto- 
ration of  a  specie  currency,  whenever  it  should  be  found 
practicable.  Having  been,  in  July,  1818,  continued  to 
July,  1819,  it  was  understood  that,  in  the  interim,  the 
important  question  of  the  time  at  which  cash  payments 
should  be  resumed  should  be  finally  settled.  In  the 
latter  part  of  the  year  1818  the  circulation  of  the  bank 
had  been  greatly  reduced,  and  a  severe  scarcity  of  money 
was  felt  in  the  London  market.  Such  was  the  state  of 
things  in  England.  On  the  continent  other  important 
events  took  place.  The  French  Indemnity  Loan  had 
been  negotiated  in  the  summer  of  1818,  and  the  propor- 


326  DANIEL  WEBSTER. 

tion  of  it  belonging  to  Austria,  Russia,  and  Prussia  had 
been  sold.  This  created  an  unusual  demand  for  gold 
and  silver  in  these  eastern  States  of  Europe.  It  has 
been  stated  that  the  amount  of  the  precious  metals 
transmitted  to  Austria  and  Eussia  in  that  year  was  at 
least  twenty  millions  sterling.  ■  Other  large  sums  were 
sent  to  Prussia  and  to  Denmark.  The  effect  of  this 
sudden  drain  of  specie,  felt  first  at  Paris,  was  communi- 
cated to  Amsterdam  and  Hamburg,  and  all  other  com- 
mercial places  in  the  north  of  Europe. 

The  paper  system  of  England  had  certainly  communi- 
cated an  artificial  value  to  property.  It  had  encouraged 
speculation  and  excited  ovei'trading.  When  the  shock 
therefore  came,  and  this  violent  pressure  for  money 
acted  at  the  same  moment  on  the  continent  and  in  Eng- 
land, inflated  and  unnatural  prices  could  be  kept  up  no 
longer.  A  reduction  took  place,  which  has  been  esti- 
mated to  have  been  at  least  equal  to  a  fall  of  30%,  if 
not  40%.  The  depression  was  universal,  and  the  change 
was  felt  in  the  United  States  severely,  though  not 
equally  so  in  every  part  of  them.  There  are  those,  I 
am  aware,  who  maintain  that  the  events  to  which 
I  have  alluded  did  not  cause  the  great  fall  of  prices, 
but  that  that  fall  was  natural  and  inevitable,  from  the 
previously  existing  state  of  things,  the  abundance  of 
commodities,  and  the  want  of  demand.  But  that  would 
only  prove  that  the  effect  was  produced  in  another  way, 
rather  than  by  another  cause.  If  these  great  and  sudden 
calls  for  money  did  not  reduce  prices,  but  prices  fell 
as  of  themselves  to  their  natural  state,  still  the  result 
is  the  same  ;  for  we  perceive  that  after  these  new  calls 
for  money,  prices  could  not  be  kept  longer  at  their  un- 
natural height. 

About  the  time  of  these  foreign  events  our  own  bank 
system  underwent  a  change  ;  and  all  these  causes,  in 
my  view  of  the  subject,  concurred  to  produce  the  great 


SPEECH  OF  1824.  327 

shock  which  took  place  in  our  commercial  cities,  and 
through  many  parts  of  the  country.  The  year  1819 
was  a  year  of  numerous  failures  and  very  considerable 
distress,  and  would  have  furnished  far  better  grounds 
than  exist  at  present  for  that  gloomy  representation  of 
our  condition  which  has  been  presented.  Mr.  Speaker 
has  alluded  to  the  strong  inclination  which  exists,  or 
has  existed,  in  various  parts  of  the  country  to  issue 
paper  money,  as  a  proof  of  great  existing  difficulties. 
I  regard  it  rather  as  a  very  productive  cause  of  those 
difficulties  ;  and  the  committee  will  not  fail  to  observe 
that  there  is,  at  this  moment,  much  the  loudest  com- 
plaint of  distress  precisely  where  there  has  been  the 
greatest  attempt  to  relieve  it  by  systems  of  paper 
credit.  And,  on  the  other  hand,  content,  prosperity, 
and  happiness,  are  most  observable  in  those  parts  of 
the  country  where  there  has  been  the  least  endeavor 
to  administer  relief  by  law.  In  truth,  nothing  is  so  bane- 
ful, so  utterly  ruinous  to  all  true  industry,  as  interfering 
with  the  legal  value  of  money,  or  attempting  to  raise 
artificial  standards  to  supply  its  place.  Such  remedies 
suit  well  the  spirit  of  extravagant  speculation,  but  they 
sap  the  very  foundation  of  all  honest  acquisition.  By 
weakening  the  security  of  property  they  take  away  all 
motive  for  exertion.  Their  effect  is  to  transfer  property. 
Whenever  a  debt  is  allowed  to  be  paid  by  anything  less 
valuable  than  the  legal  currency  in  respect  to  which  it 
was  contracted,  the  difference  between  the  value  of  the 
paper  given  in  payment  and  the  legal  currency  is  pre- 
cisely so  much  property  taken  from  one  man  and  given 
to  another  by  legislative  enactment. 

AVhen  we  talk,  therefore,  of  protecting  industry,  let  us 
remember  that  the  first  measure  for  that  end  is  to  secure 
it  in  its  earnings,  to  assure  it  that  it  shall  receive  its  own. 
Before  we  invent  new  modes  of  raising  prices,  let  us 
take  care  that  existing  prices  are  not  rendered  wholly 


328  DANIEL  WEBSTER. 

unavailable  by  making  them  capable  of  being  paid  in 
depreciated  paper.    I  regard,  sir,  this  issue  of  irredeem- 
able paper  as  the  most  prominent  and  deplorable  cause 
of  whatever  pressure  still  exists  in  the  country  ;  and 
further,  I  would  put  the  question  to  the  members  of 
this  Committee,  whether  it  is  not  from  that  part  of  the 
people  who  have  tried  this  paper  system,  and  tried  it  to 
their  cost,  that  this  bill  receives  the  most  earnest  sup- 
port ?     And  I  cannot  forbear  to  ask,  further,  whether 
this  support  does  not  proceed  rather  from  a  general  feel- 
ing of  uneasiness  under  the  present  condition  of  things, 
than  from  the  clear  perception  of  any  benefit  which  the 
measure  itself  can  confer?     Is  not  all  expectation  of 
advantage  centred  in  a  sort  of  vague  hope  that  change 
may  produce  relief  ?     Debt  certainly  presses  hardest 
where  prices  have  been  longest  kept  up  by  artificial 
means.     They  find  the  shock  lightest  who  take  it  soon- 
est ;  and  I  fully  believe  that,  if  those  parts  of  the  coun- 
try which  now  suffer  most  had  not  augmented  the  force 
of  the  blow  by  deferring  it,  they  would  have  now  been 
in  a  much  better  condition  than  they  are.     We  may 
assure  ourselves,  once  for  all,  sir,  that  there  can  be  no 
such  thing  as  payment  of   debts  by  legislation.     We 
may  abolish  debts  indeed  ;  we  may  transfer  property 
by  visionary  and  violent  laws.     But  we  deceive  both 
ourselves  and  our  constituents  if  we  flatter  eitlrer  our- 
selves or  them  with  the  hope  that  there  is  any  relief 
against  whatever  pressure  exists,  but  in  economy  and 
industry.     The  depression  of  prices  and  the  stagnation 
of  business  have  been  in  truth  the  necessary  result  of 
circumstances.     No   government   could   prevent   them, 
and  no  government  can  altogether  relieve  the  people 
from  their  effect.     We  had  enjoyed  a  day  of  extraordi- 
nary prosperity  ;  we  had  been  neutral  while  the  world 
was  at  war,  and  had  found  a  great  demand  for  our  pro- 
ducts, our  navigation,  and  our  labor.     We  had  no  right 


SPEECH  OF  1S24.  329 

to  expect  that  that  state  of  things  would  continue  al- 
ways. With  the  return  of  peace  foreign  nations  would 
struggle  for  themselves,  and  enter  into  competition  with 
us  in  the  great  objects  of  pursuit. 

Now,  sir,  what  is  the  remedy  for  existing  evils  ? 
what  is  the  course  of  policy  suited  to  our  actual  con- 
dition ?  Certainly  it  is  not  our  wisdom  to  adopt  any 
system  that  may  be  offered  to  us  without  examination, 
and  in  the  blind  hope  that  whatever  changes  our  con- 
dition may  improve  it.     It  is  better  that  we  should 

*'  Bear  those  ills  we  have, 
Than  fly  to  others  that  we  know  not  of." 

We  are  bound  to  see  that  there  is  a  fitness  and  an  apti- 
tude in  whatever  measures  may  be  recommended  to  re- 
lieve the  evils  that  afflict  us  ;  and  before  we  adopt  a 
system  that  professes  to  make  great  alterations,  it  is  our 
duty  to  look  carefully  to  each  leading  interest  of  the 
community,  and  see  how  it  may  probably  be  affected  by 
our  proposed  legislation. 

And,  in  the  first  place,  what  is  the  condition  of  our 
commerce  ?  Here  we  must  clearly  perceive  that  it  is 
not  enjoying  that  rich  harvest  which  fell  to  its  fortune 
during  the  continuance  of  the  European  wars.  It  has 
been  greatly  depressed,  and  limited  to  small  profits. 
Still,  it  is  elastic  and  active,  and  seems  capable  of  re- 
covering itself  in  some  measure  from  its  depression. 
The  shipping  interest  also  has  suffered  severely,  still 
more  severely,  probably,  than  commerce.  If  anything 
should  strike  us  with  astonishment  it  is  tliat  the  navi- 
gation of  the  United  States  should  be  able  to  sustain 
itself.  Without  any  government  protection  whatever, 
it  goes  abroad  to  challenge  competition  with  the  whole 
world  ;  and,  in  spite  of  all  obstacles,  it  has  yet  been 
able  to  maintain  800,000  tons  in  the  employment  of 
foreign  trade.     How,  sir,  do  the  ship-owners  and  navi- 


330  DANIEL  WEB8TER. 

gators  accomplisli  this  ?  How  is  it  that  they  are  able 
to  meet,  ami  in  some  measure  overcome,  universal  com- 
petition ?  Not,  sir,  by  protection  and  bounties,  but  by 
unwearied  exertion,  by  extreme  economy,  by  unshaken 
perseverance,  by  that  manly  and  resolute  spirit  which 
relies  on  itself  to  protect  itself.  These  causes  alone 
enable  American  ships  still  to  keep  their  element,  and 
show  tlie  flag  of  their  country  in  distant  seas.  The 
rates  of  insurance  may  teach  us  how  thoroughly  our 
ships  are  built,  and  how  skillfully  and  safely  they  are 
navigated.  Eisks  are  taken,  as  I  learn,  from  the  United 
States  to  Liverpool,  at  1%,  and  from  the  United  States 
to  Canton  and  back  as  low  as  3%.  But  when  we  look 
to  the .  low  rate  of  freight,  and  when  we  consider,  also, 
that  the  articles  entering  into  the  composition  of  a 
ship,  with  the  exception  of  wood,  are  dearer  here  than 
in  other  countries,  we  cannot  but  be  utterly  surprised 
that  the  shipping  interest  has  been  able  to  sustain  itself 
at  all.  I  need  not  say  that  the  navigation  of  the  coun- 
try is  essential  to  its  honor  and  its  defense.  Yet,  in- 
stead of  proposing  benefit  for  it  in  this  hour  of  its  de- 
pression, we  propose  by  this  measure  to  lay  upon  it 
new  and  heavy  burdens.  In  the  discussion,  the  other 
day,  of  that  provision  of  the  bill  which  proposes  to  tax 
tallow  for  the  benefit  of  the  oil  merchants  and  whale- 
men, we  had  the  pleasure  of  hearing  eloquent  eulogiums 
upon  that  portion  of  our  shipping  employed  in  the 
whale  fishery,  and  strong  statements  of  its  importance 
to  the  public  interest.  But  the  same  bill  proposes  a 
severe  tax  upon  that  interest  for  the  benefit  of  the  iron 
manufacturer  and  the  hemp  grower.  So  that  the  tallow- 
chandlers  and  soapboilers  are  sacrificed  to  the  oil  mer- 
chants, in  order  that  these  again  may  contribute  to  the 
manufacturers  of  iron  and  the  growers  of  hemp. 

If  such  be  the  state  of  our  commerce  and  navigation, 
what  is  the  condition  of  our  home  manufactures  ?    How 


SPEECH  OF  1S24.  331 

are  they  amidst  the  general  depression  ?  Do  they  need 
further  protection  ?  and  if  any,  how  much  ?  On  all 
these  points,  wc  have  had  much  general  statement,  but 
little  precise  information.  In  the  very  elaborate  speech 
of  Mr.  Speaker,  we  are  not  supplied  with  satisfactory 
grounds  of  judging  in  these  various  particulars.  Who 
can  tell,  from  anything  yet  before  the  committee, 
whether  the  proposed  duty  be  too  high  or  too  low,  on 
any  one  article  ?  Gentlemen  tell  us,  that  they  are  in 
favor  of  domestic  industry  ;  so  am  I.  They  would  give 
it  protection;  so  would  I.  But  then  all  domestic  in- 
dustry is  not  confined  to  manufactures.  The  employ- 
ments of  agriculture,  commerce,  and  navigation,  are  all 
branches  of  the  same  domestic  industry ;  they  all 
furnish  employment  for  American  capital  and  Ameri- 
can labor.  And  when  the  question  is,  whether  new 
duties  shall  be  laid,  for  the  purpose  of  giving  further 
encouragement  to  particular  manufactures,  every  reason- 
able man  must  ask  himself,  both  whether  the  proposed 
new  encouragement  be  necessary,  and  whether  it  can  be 
given  without  injustice  to  other  branches  of  industry. 

It  is  desirable  to  know,  also,  somewhat  more  dis- 
tinctly, how  the  proposed  means  will  produce  the  in- 
tended effect.  One  great  object  proposed,  for  example, 
is  the  increase  of  the  home  market  for  the  consumption 
of  agricultural  products.  This  certainly  is  much  to  be 
desired ;  but  what  provisions  of  the  bill  are  expected 
wholly  or  principally  to  produce  this,  is  not  stated.  I 
would  not  suggest  that  some  increase  of  the  home 
market  may  not  follow  from  the  ado})tion  of  this  bill, 
but  all  its  provisions  have  not  an  equal  tendency  to 
produce  this  effect.  Those  manufactures  which  employ 
most  labor  create,  of  course,  most  demand  for  articles 
of  consumption  ;  and  those  create  least,  in  the  produc- 
tion of  which  capital  and  skill  enter  as  the  chief  in- 
gredients of  cost.     I  cannot,  sir,  take  this  bill,  merely 


332  DANIEL  WEBSTER. 

because  a  Committee  has  recommended  it.  I  cannot 
espouse  a  side,  and  figlit  under  a  flag.  I  wholly  repel 
the  idea,  that  we  must  take  this  law,  or  pass  no  law  on 
the  subject.  What  should  hinder  us  from  exercising 
our  own  judgments  upon  these  provisions,  singly  and 
severally  ?  Who  has  the  power  to  place  us,  or  why 
should  we  place  ourselves,  in  a  condition  where  we 
cannot  give  to  every  measure,  that  is  distinct  and  sep- 
arate in  itself,  a  separate  and  distinct  consideration  ? 
Sir,  I  presume  no  member  of  the  Committee  will  with- 
hold his  assent  from  what  he  thinks  right,  until  others 
will  yield  their  assent  to  what  they  think  wrong.  There 
are  many  things  in  this  bill,  acceptable  probably  to  the 
general  sense  of  the  House.  W^hy  should  not  these 
provisions  be  passed  into  a  law,  and  others  left  to  be 
decided  upon  their  own  merits,  as  a  majority  of  the 
House  shall  see  fit  ?  To  some  of  these  provisions,  I  am 
myself  decidedly  favorable ;  to  others,  I  have  great 
objections ;  and  I  should  have  been  very  glad  of  an 
opportunity  of  giving  my  own  vote  distinctly  on  propo- 
sitions, which  are,  in  their  own  nature,  essentially  and 
substantially  distinct  from  one  another. 

But,  sir,  before  expressing  my  own  opinion  upon  the 
several  provisions  of  this  bill,  I  will  advert  for  a  moment 
to  some  other  general  topics.  We  have  heard  much 
of  the  policy  of  England,  and  her  example  has  been 
repeatedly  urged  upon  us,  as  proving,  not  only  the 
expediency  of  encouragement  and  protection,  but  of 
exclusion  and  direct  prohibition  also.  I  took  occasion 
the  other  day  to  remark,  that  more  liberal  notions  were 
growing  prevalent  on  this  subject ;  that  the  policy  of 
restraints  and  prohibitions  was  getting  out  of  repute, 
as  the  triie  nature  of  commerce  became  better  under- 
stood ;  and  that,  among  public  men,  those  most  dis- 
tinguished were  most  decided  in  their  reprobation  of 
the  broad  principle  of  exclusion  and  prohibition.     Upon 


HPEECH  OF  1824.  333 

the  truth  of  this  representation,  as  matter  of  fact,  I 
supposed  there  couki  not  be  two  opinions  among  those 
who  had  observed  the  progress  of  political  sentiment  in 
other  countries,  and  were  acquainted  with  its  present 
state.  In  this  respect,  however,  it  would  seem  that  I 
was  greatly  mistaken.  We  have  heard  it  again  and 
again  declared,  that  tlie  English  government  still  ad- 
heres, with  immovable  firmness,  to  its  old  doctrines  of 
prohibition  ;  that  although  journalists,  theorists,  and 
scientific  writers  advance  other  doctrines,  yet  the  prac- 
tical men,  the  legislators,  the  government  of  the  country, 
are  too  wise  to  follow  them.  It  has  even  been  most  saga- 
ciously hinted  that  the  promulgation  of  liberal  opinions 
on  these  subjects  is  intended  only  for  a  delusion  upon 
other  nations,  to  cajole  them  into  the  folly  of  liberal 
ideals,  while  England  retains  to  herself  all  the  benefits 
of  the  admirable  old  system  of  prohibition.  We  have 
heard  from  Mr.  Speaker  a  warm  commendation  of  the 
complex  mechanism  of  this  system.  The  British  Em- 
pire, it  is  said,  is,  in  the  first  place,  to  be  protected 
against  the  rest  of  the  world ;  then  the  British  isles 
against  the  colonies  ;  next,  the  isles  respectively  against 
each  other,  —  England  herself,  as  the  heart  of  the  em- 
pire, being  protected  most  of  all,  and  against  all. 

Truly,  sir,  it  appears  to  me,  that  Mr.  Speaker's  imagi- 
nation has  seen  system,  and  order,  and  beauty  in  that 
which  is  much  more  justly  considered  as  the  result  of 
ignorance,  partiality,  or  violence.  This  part  of  English 
legislation  has  resulted,  partly  from  considering  Ireland 
as  a  conquered  country,  partly  from  the  want  of  a  com- 
plete union,  even  with  Scotland,  and  partly  from  the 
narrow  views  of  colonial  regulation,  which  in  early  and 
uninformed  periods  influenced  the  European  states. 

And,  sir,  I  imagine,  nothing  would  strike  the  public 
men  of  England  more  singulaidy  than  to  find  gentle- 
men  of   real    information,    and   much   weight   in   the 


834  DANIEL  WEBSTEH. 

councils  of  this  country,  expressing  sentiments  like 
these,  in  regard  to  the  existing  state  of  these  English 
laws.  1  have  never  said,  intleed,  that  prohibitory  laws 
did  not  exist  in  England :  we  all  know  they  do ;  but  the 
question  is,  does  she  owe  her  prosjjcrity  and  greatness 
to  these  laws  ?  I  venture  to  say,  that  such  is  not  the 
opinion  of  the  public  men  now  in  England,  and  the  con- 
tinuance of  the  laws,  even  without  any  alteration,  would 
not  be  evidence  that  their  opinion  is  different  from 
what  I  have  represented  it ;  because  the  laws  having 
existed  long,  and  great  interests  having  been  built  up  on 
the  faith  of  them,  they  cannot  now  be  repealed  without 
great  and  overwhelming  inconvenience.  Because  a  thing 
has  been  wrongly  done,  it  does  not  therefore  follow  that 
it  can  now  be  undone  ;  and  this  is  the  reason,  as  I  under- 
stand it,  upon  which  exclusion,  prohibition  and  mo- 
nopoly are  suffered  to  remain  in  any  degree  in  the 
English  system  ;  and  for  the  same  reason  it  will  be 
wise  in  us  to  take  our  measures  on  all  subjects  of  this 
kind  with  great  caution.  We  may  not  be  able,  but  at 
the  hazard  of  much  injury  to  individuals,  hereafter  to 
retrace  our  steps.  And  yet,  whatever  is  extravagant 
or  unreasonable  is  not  likely  to  endvire.  There  may 
come  a  moment  of  strong  reaction ;  and  if  no  modera- 
tion be  shown  in  laying  on  duties,  there  may  be  little 
scruple  in  taking  them  off.  It  may  here  be  observed 
that  there  is  a  broad  and  marked  distinction  between 
entire  prohibition  and  reasonable  encouragement.  It 
is  one  thing,  by  duties  or  taxes  on  foreign  articles,  to 
awaken  a  home  competition  in  the  production  of  the 
same  articles ;  it  is  another  thing  to  remove  all  com- 
petition by  a  total  exclusion  of  the  foreign  article  ;  and 
it  is  quite  another  thing  still,  by  total  prohibition,  to 
raise  at  home  manufactures  not  suited  to  the  climate, 
the  nature  of  the  country,  or  the  state  of  the  population. 
These  are  substantial  distinctions,  and  although  it  may 


SPEECH  OF  1824.  335 

not  be  easy  in  every  case  to  determine  which  of  them 
applies  to  a  given  article,  yet  the  distinctions  them- 
selves exist,  and  in  most  cases  will  be  sufficiently  clear 
to  indicate  the  true  course  of  policy ;  and,  unless  I  have 
greatly  mistaken  the  prevailing  sentiment  in  the  coun- 
cils of  England,  it  grows  every  day  more  and  more 
favorable  to  the  diminution  of  restrictions,  and  to  the 
wisdom  of  leaving  much  (I  do  not  say  everything,  for  that 
would  not  be  true)  to  the  enterprise  and  the  discretion 
of  individuals.  I  should  certainly  not  have  taken  up 
the  time  of  the  Committee  to  state  at  any  length  the 
opinions  of  other  governments,  or  of  the  public  men  of 
other  countries,  upon  a  subject  like  this;  but  an  occa- 
sional remark  made  by  me  the  other  day  having  been 
so  directly  controverted,  especially  by  Mr.  Speaker,  in 
his  observations  yesterday,  I  must  take  occasion  to  refer 
to  some  proofs  of  what  I  have  stated. 

What  then  is  the  state  of  English  opinion  ?  Every- 
body knows  that,  after  the  termination  of  the  late 
European  war,  there  came  a  time  of  great  pressure  in 
England.  Since  her  example'  has  been  quoted,  let  it 
be  asked  in  what  mode  her  government  sought  relief. 
Did  it  aim  to  maintain  artificial  and  unnatural  prices  ? 
Did  it  maintain  a  swollen  and  extravagant  paper  circu- 
lation ?  Did  it  carry  further  the  laws  of  prohibition 
and  exclusion  ?  Did  it  draw  closer  the  cords  of  colonial 
restraint  ?  No,  sir,  but  precisely  the  reverse.  Instead 
of  relying  on  legislative  contrivances  and  artificial  de- 
vices, it  trusted  to  the  enterprise  and  industry  of  the 
people  ;  which  it  sedulously  sought  to  excite,  not  by  im- 
posing restraint,  but  by  removing  it,  wherever  its  removal 
was  practicable.  In  May,  1820,  the  attention  of  the  gov- 
ernment having  been  much  turned  to  the  state  of  foreign 
trade,  a  distinguished  member  ^  of  the  House  of  Peers 
brought  forward  a  parliamentary  motion  upon  that  sub- 

^  Lord  Lansdowne. 


336  DANIEL  WEBSTEB. 

]eot,  followed  by  an  ample  discussion,  and  a  full  state- 
ment of  liis  own  opinions.     In  the  course  of  his  remarks 
lie  observed   "that  there  ought  to  be  no  prohibitory- 
duties,  as  such  ;  for  tliat  it  was  evident,  that  where  a 
manufacture  could  not  be  carried  on,  or  a  production 
raised,  but  under  the  protection  of  a  prohibitory  duty, 
that  manufacture,  or  that  produce,  could  not  be  brought 
to  market  but  at  a  loss.     In  his  opinion,  the  name  of 
strict  prohibition  might,  therefore,  in  commerce,  be  got 
rid  of  altogether ;  but  he  did  not  see  the  same  objection 
to  protecting  duties,  which,  while  they  admitted  of  the 
introduction   of   commodities   from    abroad    similar   to 
those  which  we  ourselves  manufactured,  placed  them  so 
much  on  a  level  as  to  allow  a  competition    between 
them."     "  No  axiom,"  he  added,  "  was  more  true  than 
this :   that  it  was  by  growing  what  the  territory  of  a 
country  could  grow  most  cheaply,  and  by  receiving  from 
other  countries  what  it  could  not  produce  except  at  too 
great  an  expense,  that  the  greatest  degree  of  happiness 
was  to  be  communicated  to  the  greatest  extent  of  popula- 
tion."   In  assenting  to  the  motion,  the  first  Minister  ^  of 
the  Crown  expressed  his  own  opinion  of  the  great  advan- 
tage resulting  from  unrestricted  freedom  of  trade.     "Of 
the  soundness  of  that  general  principle,"  he  observed, 
"1  can  entertain  no  doubt.     I  can  entertain  no  doubt 
of  what  would  have  been  the  great  advantages  to  the 
civilized  world,  if  the  system  of  unrestricted  trade  had 
been  acted   upon   by  every   nation,   from   the   earliest 
period  of  its  commercial  intercourse  with  its  neighbors. 
If  to  those  advantages  there  could  have  been  any  excep- 
tions, I  am  j)ersuaded  that  they  would  have  been  but 
few ;  and  I  am  also  persuaded  that  the  cases,  to  which 
they  would   have    referred,   would   not   have  been,   in 
themselves,  connected  with  the  trade  and  commerce  of 
England.     But  we  are  now  in  a  situation  in  which,  —  I 

^  Lord  Liverpool. 


SPEECH  OF  1824.  837 

will  not  say  that  a  reference  to  the  principle  of  unre- 
stricted trade  can  be  of  no  use,  because  such  a  reference 
may  correct  erroneous  reasoning,  —  but  in  which  it  is 
impossible  for  us,  or  for  any  country  in  the  world,  but 
the  United  States  of  America,  to  act  unreservedly  on 
that  principle.  The  commercial  regulations  of  the  Eu- 
ropean world  have  been  long  established,  and  cannot 
suddenly  be  departed  from."  Having  supposed  a  propo- 
sition to  be  made  to  England,  by  a  foreign  state,  for 
free  commerce  and  intercourse,  and  an  unrestricted  ex- 
change of  agricultural  products  and  of  manufactures,  he 
proceeds  to  observe  :  "  It  would  be  impossible  to  accede 
to  such  a  proposition.  We  have  risen  to  our  present 
greatness  under  a  different  system.  Some  suppose  that 
we  have  risen  in  consequence  of  that  system ;  others, 
of  whom  I  am  one,  believe  that  we  have  risen  in  spite 
of  that  system.  But,  whichever  of  these  hypotheses 
be  true,  certain  it  is,  that  we  have  risen  under  a  very 
different  system  than  that  of  free  and  unrestricted  trade. 
It  is  utterly  impossible,  with  our  debt  and  taxation, 
even  if  they  Avere  but  half  their  existing  amount,  that 
we  can  suddenly  adopt  the  system  of  free  trade."  Lord 
Ellenborough,  in  the  same  debate,  said,  "  That  he  attrib- 
uted the  general  distress  then  existing  in  Europe  to 
the  regulations  that  had  taken  place  since  the  destruc- 
tion of  the  French  power.  Most  of  the  states  on  the 
continent  had  surrounded  themselves  as  with  walls  of 
brass,  to  inhibit  intercourse  with  other  states.  Inter- 
course was  prohibited,  even  in  districts  of  the  same 
state,  as  was  the  case  in  Austria  and  Sardinia.  Thus, 
though  the  taxes  on  the  people  had  been  lightened,  the 
severity  of  their  condition  had  been  increased.  He 
believed  that  the  discontent  which  pervaded  most  parts 
of  Europe,  and  especially  Germany,  was  more  owing  to 
commercial  restrictions  tlian  to  any  theoretical  doc- 
trines on  government;  and  that  a  free  communication 


^38  DANIEL  WEBSTER. 

among  them  would  do  more  to  restore  tranquillity  than 
any  other  step  that  could  be  adopted.  He  objected  to 
all  atteni])ts  to  frustrate  the  benevolent  intentions  of 
Providence,  which  had  given  to  various  countries  various 
wants,  in  order  to  bring  them  together.  He  objected 
to  it  as  antisocial ;  he  objected  to  it,  as  making  com- 
merce the  means  of  barbarizing,  instead  of  enlightening 
nations.  The  state  of  the  trade  with  France  was  the 
most  disgraceful  to  both  countries ;  the  two  greatest  civil- 
ized nations  of  the  world,  placed  at  a  distance  of  scarcely 
twenty  miles  from  each  other,  had  contrived,  by  their 
artificial  regulations,  to  reduce  their  commerce  with 
each  other  to  a  mere  nullity."  Every  member,  speaking 
on  this  occasion,  agreed  in  the  general  sentiments  favor- 
able to  unrestricted  intercourse,  which  had  thus  been 
advanced ;  one  of  them  remarking,  at  the  conclusion  of 
the  debate,  that  "  the  principles  of  free  trade,  which  he 
was  happy  to  see  so  fully  recognized,  were  of  the  utmost 
consequence ;  for,  though,  in  the  present  circumstances 
of  the  country,  a  free  trade  was  vmattainable,  yet  their 
task  hereafter  was  to  approximate  to  it.  Considering 
the  prejudices  and  interests  which  were  opposed  to  the 
recognition  of  that  principle,  it  was  no  small  indication 
of  the  firmness  and  liberality  of  government  to  have  so 
fully  conceded  it." 

Sir,  we  have  seen,  in  the  course  of  this  discussion, 
that  several  gentlemen  have  expressed  their  high  ad- 
miration of  the  silk  manufacture  of  England.  Its  com- 
mendation was  begun,  I  think,  by  the  honorable  member 
from  Vermont,  who  sits  near  me,  who  thinks  that  that 
alone  gives  conclusive  evidence  of  the  benefits  produced 
by  attention  to  manufactures,  inasmuch  as  it  is  a  great 
source  of  wealth  to  the  nation,  and  has  amply  repaid  all 
the  cost  of  its  protection.  Mr.  Speaker's  approbation 
of  this  part  of  the  English  example  was  still  warmer. 
Xow,  sir,  it  does  so  happen  that  both  these  gentlemen 


SPEECH  OF  1824.  339 

differ  very  widely  on  this  point  from  the  opinions  en- 
tertained in  England  by  persons  of  the  first  rank,  both 
of  knowledge  and  of  power.  In  the  debate  to  which  I 
have  already  referred,  the  proposer  of  the  motion  urged 
the  expediency  of  providing  for  the  admission  of  the 
silks  of  France  into  England.  "He  was  aware,"  he 
said,  "  that  there  was  a  poor  and  industrious  body  of 
manufacturers  whose  interests  must  suffer  by  such  an 
arrangement,  and  therefore  he  felt  that  it  would  be  the 
duty  of  parliament  to  provide  for  the  present  generation 
by  a  large  parliamentary  grant.  It  was  conforxiiable  to 
every  principle  of  sound  justice  to  do  so,  when  the  in- 
terests of  a  particular  class  were  sacrificed  to  the  good 
of  the  whole."  In  answer  to  these  observations.  Lord 
Liverpool  said  that,  with  reference  to  several  branches 
of  manufactures,  time  and  the  change  of  circumstances 
had  rendered  the  system  of  protecting  duties  merely 
nominal,  and  that,  in  his  opinion,  if  all  the  protecting 
laws  which  regarded  both  the  woollen  and  cotton  manu- 
factvires  were  to  be  repealed  no  injurious  effects  would 
thereby  be  occasioned.  "  But,"  he  observes,  "■  with 
respect  to  silk,  that  manufacture  in  this  kingdom  is  so 
completely  artificial  that  any  attempt  to  introduce  the 
principles  of  free  trade  with  reference  to  it  might  put 
an  end  to  it  altogether.  I  allow  that  the  silk  manufac- 
ture is  not  natural  to  this  country.  I  wish  we  had 
never  had  a  silk  maiuifactory.  I  allow  that  it  is  natural 
to  France  ;  I  allow  that  it  might  have  been  better  had 
each  country  adhered  exclusively  to  that  manufacture 
in  which  each  is  superior,  and  had  the  silks  of  France 
been  exchanged  for  British  cottons.  But  I  must  look 
at  things  as  they  are  ;  and  when  I  consider  the  extent 
of  capital,  and  the  immense  population,  consisting,  I 
believe,  of  about  50,000  persons  engaged  in  our  silk 
manufacture,  I  can  only  say  that  one  of  the  few  points 
in  which  I  totally  disagree  with  the  proposer  of  the 


340  DANIEL  WEBSTER. 

motion  is  the  exi)e(lionoy,  under  existing  circumstances, 
of  liokling  out  any  idea  that  it  would  be  possible  to  re- 
linquish the  silk  manufacture,  and  to  provide  for  those 
who  live  by  it  by  parliamentary  enactment.  Whatever 
objections  there  may  be  to  the  continuance  of  the  pro- 
'teeting  system,  I  repeat  that  it  is  impossible  altogether 
to  relinquish  it.  I  may  regret  that  the  system  was  ever 
commenced  ;  but  as  I  cannot  recall  that  act,  I  must  sub- 
mit to  the  inconvenience  by  which  it  is  attended,  rather 
than  expose  the  country  to  evils  of  greater  magnitude." 
Let  it  be  remembered,  sir,  that  these  are  not  the  senti- 
ments of  a  theorist,  nor  the  fancies  of  speculation,  but 
the  operative  0})inions  of  the  first  minister  of  England, 
acknowledged  to  be  one  of  the  ablest  and  most  practical 
statesmen  of  his  country.  Sir,  gentlemen  could  have 
hardly  been  more  unfortunate  than  in  the  selection  of 
the  silk  manufacture  in  England,  as  an  example  of  the 
beneficial  effects  of  that  system  which  they  would  rec- 
ommend. It  is,  in  the  language  which  I  have  quoted, 
completely  artificial.  It  has  been  sustained  by  1  know 
not  how  many  laws,  breaking  in  upon  the  plainest  prin- 
ciples of  general  expediency.  At  the  last  session  of 
Parliament  the  manufacturers  petitioned  for  the  repeal 
of  three  or  four  of  these  statutes,  complaining  of  the 
vexatious  restrictions  which  they  impose  on  the  wages 
of  labor,  setting  forth  that  a  great  variety  of  orders  has 
from  time  to  time  been  issued  by  magistrates  under  the 
authority  of  these  laws,  interfering  in  an  oppressive 
manner  with  the  minutest  details  of  the  manufacture, 
such  as  limiting  the  number  of  threads  to  an  inch,  re- 
stricting the  widths  of  many  sorts  of  work,  and  deter- 
mining the  quantity  of  labor  not  to  be  exceeded  without 
extra  wages  ;  that  by  the  operation  of  these  laws  the 
rate  of  wages,  instead  of  being  left  to  the  recognized 
principles  of  regulation,  has  been  arbitrarily  fixed  by 
persons  whose  ignorance  renders  them  incompetent  to  a 


SPEECH  OF  1824.  341 

just  decision  ;  that  masters  are  compelled  by  law  to  pay 
an  equal  price  for  all  work,  whether  well  or  ill  per- 
formed ;  and  that  they  are  totally  prevented  the  use  of 
improved  machinery,  it  being  ordered  that  work,  in  the 
weaving  of  which  machinery  is  emj)loyed,  shall  be  paid 
precisely  at  the  same  rate  as  if  done  by  hand  ;  that 
these  acts  have  frequently  given  rise  to  the  most  vexa- 
tioiis  regulations,  the  unintentional  breach  of  which 
has  subjected  manufacturers  to  ruinous  penalties  ;  and 
that  the  introduction  of  all  machinery  being  prevented, 
by  which  labor  might  be  cheapened,  and  the  manufac- 
turers being  compelled  to  pay  at  a  fixed  price,  under  all 
circumstances,  they  are  prevented  from  affording  em- 
ployment to  their  workmen  in  times  of  stagnation  of 
trade,  but  are  compelled  to  stop  their  looms.  And 
finally,  they  complain  that,  notwithstanding  these  griev- 
ances under  which  they  labor,  while  carrying  on  their 
manufacture  in  London,  the  law  still  prohibits  them, 
while  they  continue  to  reside  there,  from  employing 
any  portion  of  their  capital  in  tlie  same  business  in  any 
other  part  of  the  kingdom  where  it  might  be  more 
beneficially  conducted.  Now,  sir,  absurd  as  these  laws 
must  appear  to  be  to  every  man,  the  attempt  to  repeal 
them  did  not,  as  far  as  I  recollect,  altogether  succeed. 
The  weavers  were  too  numerous,  their  interests  too 
great,  or  their  prejudices  too  strong ;  and  this  notable 
instance  of  protection  and  monopoly  still  exists,  to  be 
lamented  in  England  with  as  much  sincerity  as  it  seems 
to  be  admired  here. 

In  order  further  to  show  the  prevailing  sentiment  of 
the  English  government,  I  would  refer  to  a  report  of  a 
select  committee  of  the  House  of  Commons,  at  the  head 
of  which  was  the  vice-president  of  the  board  of  trade 
(Mr.  Wallace),  in  July,  1820.  ''The  time,"  say  that 
committee,  "  when  monopolies  could  be  successfully 
supported;  or  would  be  patiently  endured,  either  in  re- 


342  DANIEL  WEBSTER. 

S})cct  to  subjects  against  subjects,  or  particular  countries 
against  the  rest  of  the  world,  seems  to  have  passed 
away.  Commerce,  to  continue  undisturbed  and  secure, 
must  be,  as  it  was  intended  to  be,  a  source  of  reciprocal 
amit}""  between  nations,  and  an  interchange  of  produc- 
tions, to  promote  the  industry,  the  wealth,  and  the 
happiness  of  p.iankind."  In  moving  for  the  reappoint- 
ment of  the  committee,  in  February,  1823,  the  same 
gentleman  said  :  "  We  must  also  get  rid  of  that  feeling 
of  appropriation,  which  exhibited  itself  in  a  disposition 
tt)  produce  everything  necessary  for  our  own  consump- 
tion, and  to  render  ourselves  independent  of  the  world. 
No  notion  could  be  more  absurd  or  mischievous  ;  it  led, 
even  in  peace,  to  an  animosity  and  rancor  greater  than 
existed  in  time  of  war.  Undoubtedly  there  would  be 
great  prejudices  to  combat,  both  in  this  country  and 
elsewhere,  in  the  attempt  to  remove  the  difficulties 
which  are  most  obnoxious.  It  would  be  impossible  to 
forget  the  attention  which  was  in  some  respects  due  to 
the  present  system  of  protections,  although  that  atten- 
tion ought  certainly  not  to  be  carried  beyond  the  abso- 
lute necessity  of  the  case."  And  in  a  second  report  of 
the  committee,  drawn  by  the  same  gentleman,  in  that 
part  of  it  which  proposes  a  diminution  of  duties  on 
timber  from  the  north  of  Europe,  and  the  polic}^  of  giv- 
ing a  legislative  preference  to  the  importation  of  such 
timber  in  the  log,  and  a  discouragement  of  the  importa- 
tion of  deals,  it  is  stated  that  the  committee  reject  this 
policy,  because,  among  other  reasons,  "  it  is  founded  on 
a  principle  of  exclusion,  which  they  are  most  averse  to 
see  brought  into  operation,  in  any  new  instance,  without 
the  warrant  of  some  evident  and  great  political  expedi- 
ency." And  on  many  subsequent  occasions  the  same 
gentleman  has  taken  occasion  to  observe  that  he  differed 
from  those  who  thought  that  manufactures  could  not 
flourish  without  restrictions  on  trade ;  that  old  preju- 


SPEECH  OF  1824.  343 

dices  of  that  sort  were  dying  away,  and  that  more 
liberal  and  just  sentiments  were   taking   their   place. 

These  sentiments  appear  to  have  been  followed  by 
important  legal  provisions,  calculated  to  remove  restric- 
tions and  prohibitions  where  they  were  most  severely 
felt ;  that  is  to  say,  in  several  branches  of  navigation 
and  trade.  They  have  relaxed  their  colonial  system, 
they  have  opened  the  ports  of  their  islands,  and  have 
done  away  the  restriction  which  limited  the  trade  of 
the  colony  to  the  mother  country.  Colonial  products 
can  now  be  carried  directly  from  the  islands  to  any  part 
of  Europe;  and  it  may  not  be  improbable,  considering 
our  own  high  duties  on  spirits,  that  that  article  may 
be  exchanged  hereafter  by  the  English  West  India  col- 
onies, directly,  for  the  timber  and  deals  of  the  Baltic. 
It  may  be  added  that  Mr.  Lowe,  whom  the  gentleman 
has  cited,  says  that  nobody  supposes  that  the  three 
great  staples  of  English  manufactures,  cotton,  woollen, 
and  hardware,  are  benefited  by  any  existing  protecting 
duties,  and  that  one  object  of  all  these  protecting  laws 
is  usually  overlooked,  and  that  is,  that  they  have  been 
intended  to  reconcile  the  various  interests  to  taxation, 
the  corn  law,  for  example,  being  designed  as  some 
equivalent  to  the  agricultural  interest  for  the  burden  of 
tithes  and  of  poor  rates. 

In  fine,  sir,  I  think  it  is  clear  that  if  we  now  embrace 
the  system  of  prohibitions  and  restrictions  we  shall 
show  an  affection  for  what  others  have  discarded,  and 
be  attempting  to  ornament  ourselves  with  cast-off  ap- 
parel. 

Sir,  I  should  not  have  gone  into  this  prolix  detail  of 
opinions  from  any  consideration  of  their  special  impor- 
tance on  the  present  occasion,  but,  having  happened  to 
state  that  such  was  the  actual  opinion  of  the  government 
of  England  at  the  present  time,  and  the  accuracy  of 
this  representation  having  been  so  confidently  denied, 


344  DANIEL   WEBSTER. 

I  liave  chosen  to  put  the  matter  beyond  doubt  or  cavil, 
although  at  the  expense  of  these  tedious  citations.  I 
shall  have  occasion  hereafter  of  referring  more  particu- 
larly to  sundry  recent  British  enactments,  by  way  of 
showing  the  diligence  and  spirit  with  which  that  gov- 
ernment strives  to  sustain  its  navigating  interest,  by 
opening  the  widest  possible  range  to  the  enterprise  of 
individual  adventurers.  I  repeat  that  I  have  not  alluded 
to  these  examples  of  a  foreign  state  as  being  jfit  to  con- 
trol our  own  policy.  In  the  general  principle  I  ac- 
quiesce. Protection,  when  carried  to  the  point  which 
is  now  recommended,  that  is,  to  entire  prohibition, 
seems  to  me  destructive  of  all  commercial  intercourse 
between  nations.  We  are  urged  to  adopt  the  system 
upon  general  principles  ;  and  what  would  be  the  conse- 
quence of  the  universal  application  of  such  a  general 
l)rinciple,  but  that  nations  would  abstain  entirely  from 
all  intercourse  with  one  another  ?  I  do  not  admit  the 
general  principle  ;  on  the  contrary,  I  think  freedom  of 
trade  to  be  the  general  principle,  and  restriction,  the 
exception.  And  it  is  for  every  state,  taking  into  view 
its  own  condition,  to  judge  of  the  propriety  in  any  case 
of  making  an  exception,  constantly  preferring,  as  I  think 
all  wise  governments  will,  not  to  depart  without  urgent 
reason  from  the  general  rule. 

There  is  another  point  in  the  existing  policy  of  Eng- 
land to  which  I  would  most  earnestly  invite  the  atten- 
tion of  the  Committee  ;  I  mean  the  warehouse  system, 
or  what  we  usually  call  the  system  of  drawback.  Very 
great  prejudices  appear  to  me  to  exist  with  us  on  that 
subject.  We  seem  averse  to  the  extension  of  the  prin- 
ciple. The  English  government,  on  the  contrary,  appear 
to  have  carried  it  to  the  extreme  of  liberality.  They 
have  arrived,  however,  at  their  present  opinions  and 
present  practice  by  slow  degrees.  The  transit  system 
was  commenced  about  the  year  1803,  but  the  first  law 


SPEECH  OF  1824.  345 

was  partial  and  limited.  It  admitted  the  importation  of 
raw  materials  for  exportation,  but  it  excluded  almost 
every  sort  of  manufactured  goods.  This  was  done  for 
the  same  reason  that  we  propose  to  prevent  the  transit 
of  Canadian  wheat  through  the  United  States,  —  the 
fear  of  aiding  the  competition  of  the  foreign  article  with 
our  own,  in  foreign  markets.  Better  reflection,  or  more 
experience,  has  induced  them  to  abandon  that  mode  of 
reasoning,  and  to  consider  all  such  means  of  influencing 
foreign  markets  as  nugatory  ;  since,  in  the  present  active 
and  enlightened  state  of  the  woi'ld,  nations  will  supply 
themselves  from  the  best  sources,  and  the  true  policy 
of  all  producers,  whether  of  raAv  materials  or  of  manu- 
factured articles,  is,  not  vainly  to  endeavor  to  keep 
other  venders  out  of  the  market,  but  to  conquer  them 
in  it,  by  the  quality  and  the  cheapness  of  their  articles. 
The  present  policy  of  England,  therefore,  is  to  allure 
the  importation  of  commodities  into  England,  there  to 
be  deposited  in  English  warehouses,  thence  to  be  ex- 
ported in  assorted  cargoes,  and  thus  enabling  her  to 
carry  on  a  general  export  trade  to  all  quarters  of  the 
globe.  Articles  of  all  kinds,  with  the  single  exception 
of  tea,  may  be  brought  into  England  from  any  part  of 
the  world,  in  foreign  as  well  as  British  ships,  there 
warehoused,  and  again  exported,  at  the  pleasure  of  the 
owner,  without  the  payment  of  any  duty  or  government 
charge  whatever. 

While  I  am  upon  this  subject,  I  would  take  notice  also 
of  the  recent  proposition  in  the  English  Parliament  to 
abolish  the  tax  on  imported  wool ;  and  it  is  observable 
that  those  who  support  this  proposition  give  the  same 
reasons  as  have  been  offered  here  within  the  last  week, 
against  the  duty  which  we  propose  on  the  same  article. 
They  say  that  their  manufacturers  require  a  cheap  and 
coarse  wool,  for  the  supply  of  the  Mediterranean  and 
Levant  trade,  and  that,  without  a  more  free  admission 


840  DANIEL  WEBSTER. 

of  the  wool  of  the  continent,  that  trade  will  all  fall  into 
the  hands  of  the  Germans  and  Italians,  who  will  carry 
it  on  through  Leghorn  and  Trieste.  While  there  is  this 
duty  on  foreign  wool  to  protect  the  wool  growers  of 
England,  there  is  on  the  other  hand  a  prohibition  on 
the  exportation  of  the  native  article  in  aid  of  the  manu- 
factiirers.  The  o})inion  seems  to  be  gaining  strength, 
that  the  true  policy  is  to  abolish  both. 

Laws  have  long  existed  in  England,  preventing  the 
emigration  of  artisans  and  the  exportation  of  machinery ; 
but  the  policy  of  these,  also,  has  become  doubted,  and 
an  inquiry  has  been  instituted  in  Parliament  into  the 
expediency  of  repealing  them.  As  to  the  emigration 
of  artisans,  say  those  who  disapprove  the  laws,  if  that 
were  desirable,  no  law  could  effect  it ;  and  as  to  the  ex- 
portation of  machinery,  let  us  fabricate  and  export  it, 
as  we  would  any  other  commodity.  If  France  is  deter- 
mined to  spin  and  weave  her  own  cotton,  let  us,  if  we 
may,  still  have  the  benefit  of  furnishing  the  machinery. 

I  have  stated  these  things,  sir,  to  show  what  seems 
to  be  the  general  tone  of  thinking  and  reasoning  on 
these  subjects  in  that  country,  the  example  of  which 
has  been  so  much  pressed  upon  us.  Whether  the  pre- 
sent policy  of  England  be  right  or  wrong,  wise  or  un- 
wise, it  cannot,  as  it  seems  clearly  to  me,  be  quoted  as 
an  authority  for  carrying  further  the  restrictive  and 
exclusive  system,  either  in  regard  to  manufactvires  or 
trade.  To  reestablish  a  sound  currency,  to  meet  at  once 
the  shock,  tremendous  as  it  was,  of  the  fall  of  prices, 
to  enlarge  her  capacity  for  foreign  trade,  to  open  wide 
the  field  of  individual  enterprise  and  competition,  and 
to  say,  plainly  and  distinctly,  that  the  country  must  re- 
lieve itself  from  the  embarrassments  which  it  felt,  by 
economy,  frugality,  and  renewed  efforts  of  enterprise ; 
these  appear  to  be  the  general  outline  of  the  policy 
which  England  has  pursued. 


SPEECH  OF  1S24.  347 

Mr.  Chairman,  I  will  now  proceed  to  say  a  few  words 
upon  a  topic,  but  for  the  introduction  of  which  into  this 
debate,  I  should  not  have  given  the  Committee,  on  this 
occasion,  the  trouble  of  hearing  me.  Some  days  ago  — 
I  believe  it  was  when  we  were  settling  the  controversy 
between  the  oil  merchants  and  the  tallow-chandlers  — 
the  balance  of  trade  made  its  appearance  in  debate,  and 
I  must  confess,  sir,  that  I  spoke  of  it,  or  rather  spoke  to 
it,  somewhat  freely  and  irreverently.  I  believe  I  used 
the  hard  names  which  have  been  imputed  to  me  ;  and 
I  did  it  simply  for  the  purpose  of  laying  the  spectre 
and  driving  it  back  to  its  tomb.  Certainly,  sir,  when 
I  called  the  old  notion  on  this  subject  nonsense,  I  did 
not  suppose  that  I  should  offend  any  one,  unless  the 
dead  should  happen  to  hear  me.  All  the  living  genera- 
tion, I  took  it  for  granted,  would  think  the  term  very 
properly  applied.  In  this,  however,  I  was  mistaken. 
The  dead  and  the  living  rise  up  together  to  call  me 
to  account,  and  I  must  defend  myself  as  well  as  I  am 
able. 

Let  us  inquire,  then,  sir,  what  is  meant  by  an  unfa- 
vorable balance  of  trade,  and  what  the  argument  is, 
drawn  from  that  source.  By  an  unfavorable  balance  of 
trade,  I  understand,  is  meant  that  state  of  things  in 
which  importation  exceeds  exportation.  To  apply  it  to 
our  own  case,  if  the  value  of  goods  imported  exceed  the 
value  of  those  exported,  then  the  balance  of  trade  is 
said  to  be  against  us,  inasmuch  as  we  have  run  in  debt 
to  the  amount  of  this  difference.  Therefore  it  is  said 
that  if  a  nation  continue  long  in  a  commerce  like  this,  it 
must  be  rendered  absolutely  bankrupt.  It  is  in  the  con- 
dition of  a  man  that  buys  more  than  he  sells  ;  and  how 
can  such  a  traffic  be  maintained  without  ruin  ?  ISToav, 
sir,  the  whole  fallacy  of  this  argument  consists  in  sup- 
posing that,  whenever  the  value  of  imports  exceeds  that 
of  exports,  a  debt  is  necessarily  created  to  the  extent  of 


318  DANIEL  WEBSTER. 

the  difference;  whereas,  ordinarily,  the  import  is  no 
more  than  the  result  of  the  export,  augmented  in  value 
by  the  labor  of  traus})ortatiou.  The  excess  of  imports 
over  exports,  in  truth,  usually  shows  the  gains,  not  the 
losses,  of  trade  ;  or,  in  a  country  that  not  only  buys  and 
sells  goods,  but  employs  ships  in  carrying  goods  also,  it 
shows  the  profits  of  commerce  and  the  earnings  of  nav- 
igation. Notliing  is  more  certain  than  that  in  the  usual 
course  of  things,  and  taking  a  series  of  years  together, 
the  value  of  our  imports  is  the  aggregate  of  our  exports 
and  our  freights.  If  the  value  of  commodities  imported 
in  a  given  case  did  not  exceed  the  value  of  the  outward 
cargo,  with  which  they  were  purchased,  then  it  would 
be  clear  to  every  man's  common  sense  that  the  voyage 
had  not  been  profitable.  If  such  commodities  fell  far 
short  in  value  of  the  cost  of  the  outward  cargo,  then  the 
voyage  would  be  a  very  losing  one  ;  and  yet  it  would 
present  exactly  that  state  of  things  which,  according  to 
the  notion  of  a  balance  of  trade,  can  alone  indicate  a 
prosperous  commerce.  On  the  other  hand,  if  the  return 
cargo  were  found  to  be  worth  much  more  than  the  out-- 
ward  cargo,  while  the  merchant,  having  paid  for  the 
goods  exported,  and  all  the  expenses  of  the  voyage, 
finds  a  handsome  sum  yet  in  his  hands  which  he  calls 
l)rofits,  the  balance  of  trade  is  still  against  him,  and, 
whatever  he  may  think  of  it,  he  is  in  a  very  bad  way. 
Although  one  individual  or  all  individuals  gain,  the  na- 
tion loses  ;  while  all  its  citizens  grow  rich,  the  country 
grows  poor.  This  is  the  doctrine  of  the  balance  of 
trade.  Allow  me,  sir,  to  give  an  instance  tending  to 
show  how  unaccountably  individuals  deceive  themselves 
and  imagine  themselves  to  be  somewhat  rapidly  mend- 
ing their  condition,  while  they  ought  to  be  persuaded 
that,  by  that  infallible  standard,  the  balance  of  trade, 
they  are  on  the  high  road  to  ruin.  Some  years  ago,  in 
better  times  than  the  present,  a  Ship  left  one  of  the 


SPEECH  OF  1824.  349 

towns  of  New  England  with  70,000  specie  dollars.  She 
proceeded  to  Mocha,  on  the  Red  Sea,  and  there  laid  out 
these  dollars  in  coffee,  drugs,  spices,  and  other  articles 
procured  in  that  market.  With  this  new  cargo  she  pro- 
ceeded to  Europe  ;  two  thirds  of  it  Avere  sold  in  Hol- 
land for  $130,000,  which  the  ship  brought  back  and 
placed  in  the  same  bank  from  the  vaults  of  which  she 
had  taken  her  original  outfit.  The  other  third  was 
sent  to  the  ports  of  the  Mediterranean,  and  produced 
a  return  of  $25,000  in  specie  and  $15,000  in  Italian 
merchandise.  These  sums  together  make  $170,000 
imported,  which  is  $100,000  more  than  was  exported, 
and  is  therefore  proof  of  an  unfavorable  balance  of 
trade,  to  that  amount,  in  this  adventure.  We  should 
find  no  great  difficulty,  sir,  in  paying  off  our  balances  if 
this  were  the  nature  of  them  all. 

The  truth  is,  Mr.  Chairman,  that  all  these  obsolete 
and  exploded  notions  had  their  origin  in  very  mistaken 
ideas  of  the  true  nature  of  commerce.  Commerce  is  not 
a  gambling  among  nations  for  a  stake,  to  be  won  by 
some  and  lost  by  others.  It  has  not  the  tendency 
necessarily  to  impoverish  one  of  the  parties  to  it,  while 
it  enriches  the  other ;  all  parties  gain,  all  parties  make 
profits,  all  parties  grow  rich,  by  the  operations  of  just 
and  liberal  commerce.  If  the  world  had  but  one  clime 
and  but  one  soil ;  if  all  men  had  the  same  wants  and 
the  same  means  on  the  spot  of  their  existence  to  grat- 
ify those  wants,  —  then,  indeed,  what  one  obtained  from 
the  other  by  exchange  would  injure  one  party  in  the 
same  degree  that  it  benefited  the  other;  then,  indeed, 
there  would  be  some  foundation  for  the  balance  of 
trade.  But  Providence  has  disposed  our  lot  much 
more  kindly.  We  inhabit  a  various  earth.  We  have 
reciprocal  wants,  and  reci})rocal  means  for  gratifying 
one  another's  wants.  This  is  the  true  origin  of  com- 
merce,  which   is    nothing   more  than  an   exchange  of 


350  DANIEL  WEBSTER. 

equivalents,  and  from  the  rude  barter  of  its  primitive 
state  to  the  refined  and  complex  condition  in  which  we 
see  it,  its  principle  is  uniformly  the  same ;  its  only  ob- 
ject being,  in  every  stage,  to  produce  that  exchange  of 
commodities  between  individuals  and  between  nations 
which  shall  conduce  to  the  advantage  and  to  the  happi- 
ness of  both.  Commerce  between  nations  has  the  same 
essential  character  as  commerce  between  individuals,  or 
between  parts  of  the  same  nation.  Cannot  two  individ- 
uals make  an  interchange  of  commodities  which  shall 
prove  beneficial  to  both,  or  in  which  the  balance  of  trade 
shall  be  in  favor  of  both  ?  If  not,  the  tailor  and  the 
shoemaker,  the  farmer  and  the  smith  have  hitherto 
very  much  misunderstood  their  own  interest.  And 
with  regard  to  the  internal  trade  of  a  country,  in  which 
the  same  rule  would  apply  as  between  nations,  do  we 
ever  speak  of  such  an  intercourse  being  prejudicial  to 
one  side  because  it  is  useful  to  the  other  ?  Do  we  ever 
hear  that,  because  the  intercourse  between  New  York 
and  Albany  is  advantageous  to  one  of  those  places,  it 
must  therefore  be  ruinous  to  the  other  ? 

May  I  be  allowed,  sir,  to  read  a  passage  on  this  sub- 
ject from  the  observations  of  a  gentleman,  in  my 
opinion  one  of  the  most  clear  and  sensible  writers  and 
speakers  of  the  age  upon  subjects  of  this  sort  ?  ^  '<  There 
is  no  political  question  on  which  the  prevalence  of  false 
principles  is  so  general  as  in  what  relates  to  the  nature 
of  commerce  and  to  the  pretended  balance  of  trade  ; 
and  there  are  few  which  have  led  to  a  greater  number  of 
practical  mistakes,  attended  with  consequences  exten- 
sively prejudicial  to  the  happiness  of  mankind.  In  this 
country  our  parliamentary  proceedings,  our  public  docu- 
ments, and  the  works  of  several  able  and  popular  writ- 
ers have  combined  to  propagate  the  impression  that  we 
are  indebted  for  much  of  our  riches  to  what  is  called 

1  Mr.  Huskisson,  President  of  the  English  Board  of  Trade. 


SPEECH  OF  1824.  351 

the  balance  of  trade."  "  Our  true  policy  would  surely 
be  to  profess,  as  the  object  and  guide  of  our  commercial 
system,  that  which  every  man  who  has  studied  the  sub- 
ject must  know  to  be  the  true  principle  of  commerce, 
—  the  interchange  of  reciprocal  and  equivalent  ben- 
efit. We  may  rest  assured  that  it  is  not  in  the  nature 
of  commerce  to  enrich  one  party  at  the  expense  of  the 
other.  This  is  a  purpose  at  which,  if  it  were  practica- 
ble, we  ought  not  to  aim  ;  and  which,  if  we  aimed  at,  we 
could  not  accomplish."  These  remarks,  I  believe,  sir, 
were  written  some  ten  or  twelve  years  ago.  They  are 
in  perfect  accordance  with  the  opinions  advanced  in 
more  elaborate  treatises,  and  now  that  the  world  has 
returned  to  a  state  of  peace,  and  commerce  has  resumed 
its  natural  channels,  and  different  nations  are  enjoying, 
or  seeking  to  enjoy,  their  respective  portions  of  it,  all 
see  the  justness  of  these  ideas ;  all  see  that,  in  this  day 
of  knowledge  and  of  peace,  there  can  be  no  commerce 
between  nations  but  that  which  shall  benefit  all  who  are 
parties  to  it. 

If  it  were  necessary,  Mr.  Chairman,  I  might  ask  the 
attention  of  the  Committee  to  recur  to  a  document  be- 
fore us  on  this  subject  of  the  balance  of  trade.  It  will 
be  seen  by  reference  to  the  accounts  that,  in  the  course 
of  the  last  year,  our  total  export  to  Holland  exceeded 
$2,500,000  ;  our  total  import  from  the  same  country 
was  but  $700,000.  Now  can  any  man  be  wild  enough 
to  make  any  inference  from  this  of  the  gain  or  loss  of 
our  trade  with  Holland  for  that  year  ?  Our  trade  with 
Russia  for  the  same  year  produced  a  balance  the  other 
way ;  our  import  being  $2,000,000,  and  our  export  but 
$500,000.  But  this  has  no  more  tendency  to  show  the 
Russian  trade  a  losing  trade,  than  the  other  statement 
has  to  show  that  the  Dutch  trade  has  been  a  gainful  one. 
Neither  of  them,  by  itself,  proves  anytliing. 

Springing  out  of  this  notion  of  a  balance  of  trade. 


352  DANIEL  WEBSTER. 

tliere  luis  been  another  idea,  which  has  been  much  dwelt 
upon  in  the  course  of  this  debate  ;  that  is,  that  we  ought 
not  to  buy  of  nations  who  do  not  buy  of  us  ;  for  ex- 
ample, that  the  Eussian  trade  is  a  trade  disadvanta- 
geous to  the  country,  and  ought  to  be  discouraged,  be- 
cause in  the  ports  of  Russia  we  buy  more  than  we  sell. 
Now  allow  me  to  observe,  in  the  first  place,  sir,  that  we 
have  no  account  showing  how  much  we  do  sell  in  the 
ports  of  llussia.    Our  official  returns  show  us  only  what 
is  the  amount  of  our  direct  exports  to  her  ports.     But 
then  we  all  know  that  the  proceeds  of  other  of  our  ex- 
})orts  go  to  the  same  market,  though  indirectly.     We 
send  our  own  products,   for   example,   to  Cuba,  or  to 
Brazil ;  we  there  exchange  them  for  the  sugar  and  the 
coffee  of  those  countries,  and  these  articles  we  carry  to 
St.  Petersburg,  and  there  sell  them.     Again:  our  ex- 
^lorts  to  Holland  and  Hamburg  are  connected  directly 
or  indirectly  with  our  imports  from  Eussia.     What  dif- 
ference does  it   make,  in  sense  or   reason,  whether  a 
cargo  of  iron  be  bought  at  St.  Petersburg  by  the  ex- 
change of  a  cargo  of  tobacco,  or  whether  the  tobacco  has 
been  sold  on  the  way,  in  a  better  market,  in  a  port  of 
Holland,  the  money  remitted  to  England,  and  the  iron 
paid  for  by  a  bill  on  London  ?     There   might  indeed 
have  been  an  augmented  freight,  there  might  have  been 
some  saving  of   commissions,  if  tobacco   had  been  in 
brisk  demand  in  the  Eussian  market.     But  still  there 
is  nothing  to  show  that  the  whole  voyage  may  not 'have 
been  highly  profitable.    That  depends  upon  the  original 
cost  of  the  article  here,  the  amount  of  freight  and  in- 
surance to  Holland,  the  price  obtained  there,  the  rate 
of  exchange  between  Holland  and  England,  the  expense, 
then,  of  proceeding  to  St.  Petersburg,  the  price  of  iron 
there,  the  rate  of  exchange  between  that  x>lace  and  Eng- 
land, the  amount  of  freight  and  insurance  home,  and 
finally,  the  value  of  the  iron,  when  brought  to  our  own 


SPEECH  OF  1824.  353 

market.  These  are  the  calculations  which  determine 
the  fortune  of  the  adventure  ;  and  nothing  can  be  judged 
of  it,  one  way  or  the  other,  by  the  relative  state  of  our 
imports  or  exports  with  Holland,  England,  or  Russia. 

I  would  not  be  understood  to  deny  that  it  may  often 
be  our  interest  to  cultivate  a  trade  with  countries  that 
most  require  such  commodities  as  we  can  furnish,  and 
which  are  capable  also  of  directly  supplying  our  own 
wants.  This  is  the  simplest  and  most  original  form  of  all 
commerce,  and  is,  no  doubt,  highly  beneficial.  And  some 
countries  are  so  situated,  doubtless,  that  commerce,  in 
this  original  form,  or  something  near  it,  may  be  all  that 
they  can,  without  considerable  inconvenience,  carry  on. 
Our  trade,  for  example,  with  Madeira  and  the  Western 
Islands,  has  been  useful  to  the  country  as  furnishing -a 
demand  for  some  portion  of  our  agricultural  products, 
which  probably  could  not  have  been  bought  had  we  not 
received  their  products  in  return.  Countries  situated 
still  farther  from  the  great  marts  and  highways  of  the 
commercial  world  may  afford  still  stronger  instances  of 
the  necessity  and  utility  of  conducting  commerce  on  the 
original  principle  of  barter,  without  much  assistance 
from  the  operations  of  credit  and  exchange.  All  I 
would  be  understood  to  say  is,  that  it  by  no  means  fol- 
lows that  that  must  be  a  losing  trade  with  any  country, 
from  which  we  receive  more  of  her  products  than  she 
receives  of  ours.  And  since  I  was  supposed  the  other 
day,  in  speaking  upon  this  subject,  to  have  advanced 
opinions  which  not  only  this  country  ought  to  reject, 
but  which  also  other  countries,  and  those  the  most  dis- 
tinguished for  skill  and  success  in  commercial  inter- 
course, do  reject,  I  will  ask  leave  to  refer  again  to  the 
discussion  in  the  English  Parliament,  which  I  first 
mentioned,  relative  to  the  foreign  trade  of  that  country. 
"  With  regard,"  says  the  mover  ^  of  the  proposition,  "to 

^  The  Marquis  of  Lansdowne. 


354  DANIEL  WEBSTER. 

tlie  argument  employed  against  renewing  our  intercourse 
with  the  north  of  Europe,  namely,  that  those  who  sup- 
plied us  with  timber  from  that  quarter  would  not  re- 
ceive liritish  manufactures  in  return,  it  appeared  to  him 
futile  and  ungrounded.  If  they  did  not  send  direct  for 
our  manufactures  at  home,  they  would  send  for  them 
to  Leipsic  and  other  fairs  of  Germany.  Were  not  the 
Russian  and  Polish  merchants  purchasers  there  to  a 
great  amount  ?  But  he  would  never  admit  the  princi- 
ple, that  a  trade  was  not  profitable  because  we  were 
obliged  to  carry  it  on  with  the  precious  metals,  or  that 
we  ought  to  renounce  it  because  ou.r  manufactures 
were  not  received  by  the  foreign  nation  in  return  for 
its  produce.  Whatever  we  received  must  be  paid  for 
in  the  produce  of  our  land  and  labor,  directly  or  circu- 
itoiisly,  and  he  was  glad  to  have  the  noble  Earl's  ^ 
marked  concurrence  in  this  principle." 

Referring  ourselves  again,  sir,  to  the  analogies  of 
common  life,  no  one  would  say  that  a  farmer  or  a  me- 
chanic should  buy  only  where  he  can  do  so  by  the  ex- 
change of  his  own  produce,  or  of  his  own  manufacture. 
Such  exchange  may  be  often  convenient ;  and,  on  the 
other  hand,  the  cash  purchase  may  be  often  more  conve- 
nient. It  is  the  same  in  the  intercourse  of  nations. 
Indeed,  Mr.  Speaker  has  placed  this  argument  on  very 
clear  grounds.  It  has  been  said,  in  the  early  part  of 
the  debate,  that  if  we  cease  to  import  English  cotton 
fabrics,  England  would  no  longer  continue  to  purchase 
our  cotton.  To  this,  Mr.  Speaker  has  replied,  with 
great  force  and  justice,  that,  as  she  must  have  cotton  in 
large  quantities,  she  will  buy  the  article  where  she  can 
find  it  best  and  cheapest ;  and  that  it  would  be  quite 
ridiculous  in  her,  manufacturing  as  she  still  would  be, 
for  her  own  vast  consumption,  and  the  consumption  of 
millions  in  other  countries,  to  reject  our  uplands  be- 

^  Lord  Liverpool. 


SPEECH  OF  1824.  355 

cause  we  had  learned  to  manufacture  a  part  of  them  for 
ourselves.  And  would  it  not  be  equally  ridiculous  in 
us,  if  the  commodities  of  Russia  were  both  cheaper 
and  better  suited  to  our  wants  than  could  be  found 
elsewhere,  to  abstain  from  commerce  with  her  because 
she  will  not  receive  in  return  other  commodities  which 
we  have  to  sell,  but  which  she  has  no  occasion  to  buy  ? 
Intimately  connected,  sir,  with  this  topic,  is  another, 
which  has  been  brought  into  the  debate  ;  I  mean,  the 
evil  so  much  complained  of,  —  the  exportation  of  specie. 
We  hear  gentlemen  imputing  the  loss  of  market  at 
home  to  a  want  of  money,  and  this  want  of  money  to 
the  exportation  of  the  precious  metals.  We  hear  the 
India  and  China  trade  denounced  as  a  commerce  con- 
ducted on  our  side,  in  a  great  measure,  with  gold  and 
silver.  These  opinions,  sir,  are  clearly  void  of  all  just 
foundation,  and  we  cannot  too  soon  get  rid  of  them. 
There  are  no  shallower  reasoners  than  those  political 
and  commercial  Avriters  who  would  represent  it  to  be 
the  only  true  and  gainful  end  of  commerce  to  accu- 
mulate the  precious  metals.  These  are  articles  of  use, 
and  articles  of  merchandise,  with  this  additional  circum- 
stance belonging  to  them,  that  they  are  made,  by  the 
general  consent  of  nations,  the  standard  by  which  the 
value  of  all  other  merchandise  is  to  be  estimated.  In 
regard  to  weights  and  measures,  something  drawn  from 
external  nature  is  made  a  common  standard,  for  the 
purposes  of  general  convenience ;  and  this  is  precisely 
the  office  performed  by  the  precious  metals,  in  addition 
to  those  uses  to  which,  as  metals,  they  are  capable  of 
being  applied.  There  may  be  of  these  too  much  or  too 
little  in  a  country  at  a  particular  time,  as  there  may  be 
of  any  other  articles.  When  the  market  is  overstocked 
with  them,  as  it  often  is,  their  exportation  becomes  as 
proper  and  as  useful  as  that  of  other  commodities  under 
similar  circumstances.     We  need  no  more  repine,  when 


856  DANIEL  WEliSTEE. 

the  dollars  wliicli  have  been  brought  here  from  South 
America  are  despatched  to  other  countries,  than  when 
coffee  and  sugar  take  the  same  direction.     We  often 
deceive  oiirselves  by  attributing  to  a  scarcity  of  money 
that  which  is  the  result  of  other  causes.     In  the  course 
of  this  debate,  the  honorable  member  from  Pennsylva- 
nia has   represented  the  country  as  full  of  everything 
but  money.     But  this  I  take  to  be  a  mistake.      The 
agricultural  products  so  abundant  in  Pennsylvania  will 
not,   he  says,   sell  for  money;    but  they  will  sell   for 
money  as  quick  as  for  any  other  article  which  happens 
to  be  in  demand.     They  will  sell  for  money,  for  ex- 
ample, as  easily  as   for  coffee,  or  for  tea,  at  the  prices 
which  properly  belong  to  those  articles.     The  mistake 
lies  in  imputing  that  to  want  of  money  which  arises 
from  want  of  demand.     Men  do  not  buy  wheat  because 
they  have  money,  but  because  they  want  wheat.     To 
decide  whether  money  be  plenty  or  not,  that  is,  whether 
there  be  a  large  portion  of  capital  unemployed  or  not, 
when  the  currency  of  a  country  is  metallic,  we  must 
look,  not  only  to  the  prices  of  commodities,  but  also  to 
the  rate  of  interest.     A  low  rate  of  interest,  a  facility 
of  obtaining  money  on  loans,  a  disposition  to  invest  in 
permanent  stocks,  all  of  which  are  proofs  that  money  is 
plenty,  may  nevertheless  often  denote  a  state  not  of  the 
highest  prosperity.     They  may,  and  often  do,  show  a 
want  of  employment  for  capital ;  and  the  accumulation 
of  specie  shows  the  same  thing.     We  have  no  occasion 
for  the  precious  metals  as  money,  except  for  the  pur- 
poses of  circulation,  or  rather  of  sustaining  a  safe  paper 
circulation.     And  whenever  there  be  a  prospect  of  a 
profitable  investment  abroad,  all  the  gold  and  silver,  ex- 
cept what  these  purposes  require,  will  be  exported.    For 
the  same  reason,  if  a  demand  exist  abroad  for  sugar 
and  coffee,  Avhatever  amount  of  those  articles  might  exist 
in  the  country  beyond  the  wants  of  its  own  consump- 
tion would  be  sent  abroad  to  meet  that  demand. 


SPEECH  OF  1824.  357 

Besides,  sir,  how  should  it  ever  occur  to  anybody  that 
we  should  continue  to  export  gold  and  silver,  if  we  did 
not  continue  to  import  them  also  ?  If  a  vessel  take  our 
own  products  to  the  Havana,  or  elsewhere,  exchange 
them  for  dollars,  proceed  to  China,  exchange  them  for 
silks  and  teas,  bring  these  last  to  the  ports  of  the  Medi- 
terranean, sell  them  there  for  dollars,  and  return  to  the 
United  States  ;  this  would  be  a  voyage  resulting  in  the 
importation  of  the  precious  metals.  But  if  she  had  re- 
turned from  Cuba,  and  the  dollars  obtained  there  had 
been  shipped  direct  from  the  United  States  to  China, 
the  China  goods  sold  in  Holland,  and  the  proceeds 
brought  home  in  the  hemp  and  iron  of  llussia,  this 
would  be  a  voyage  in  which  they  were  exported.  Yet 
everybody  sees  that  both  might  be  equally  beneficial  to 
the  individuals  and  to  the  public.  I  believe,  sir,  that  in 
point  of  fact,  we  have  enjoyed  great  benefit  in  our  trade 
with  India  and  China  from  the  liberty  of  going  from 
l)lace  to  place  all  over  the  world,  without  being  obliged 
in  the  meantime  to  return  home,  a  liberty  not  here- 
tofore enjoyed  by  the  private  traders  of  England  in  re- 
gard to  India  and  China.  Suppose  tlie  American  ship 
to  be  at  Brazil,  for  example ;  she  could  proceed  with 
her  dollars  direct  to  India,  and  in  return  could  dis- 
ti'ibute  her  cargo  in  all  the  various  ports  of  Europe  or 
America;  while  an  English  ship,  if  a  private  trader, 
being  at  Brazil,  must  first  return  to  England,  and  then 
could  only  proceed  in  the  direct  line  from  England  to 
India.  This  advantage  our  countrymen  have  not  been 
backward  to  improve  ;  and  in  the  debate  to  which  I  have 
already  so  often  referred,  it  was  stated,  not  without  some 
complaint  of  the  inconvenience  of  exclusion,  and  the 
na.tural  sluggishness  of  monopoly,  that  American  ships 
were  at  that  moment  fitting  out  in  the  Thames,  to  sup- 
ply France,  Holland,  and  other  countries  on  the  conti- 
nent with  tea;  while   the  10;ist  India  Company  would 


358  -  DANIEL  WEBSTER. 

not  do  this  of  themselves,  nor  allow  any  of  their  fellow 
countrymen  to  do  it  for  them. 

There  is  yet  another  subject,  Mr.  Chairman,  upon 
which  I  would  wish  to  say  something,  if  I  might  pre- 
sume upon  the  continued  patience  of  the  Committee. 
We  hear,  sometimes,  in  the  House,  and  continually  out 
of  it,  of  the  rate  of  exchange,  as  being  one  proof  that 
"we  are  on  the  downward  road  to  ruin.  Mr.  Speaker 
himself  has  adverted  to  that  topic,  and  I  am  afraid  that 
his  authority  may  give  credit  to  opinions  clearly  un- 
founded, and  which  lead  to  very  false  and  erroneous 
conclusions.  Sir,  let  us  see  what  the  facts  are.  Ex- 
change on  England  has  recently  risen  1%  or  1^%, 
partly  owing,  perhaps,  to  the  introduction  of  this  bill 
into  Congress.  Before  this  recent  rise,  and  for  the  last 
six  months,  I  understand  its  average  may  have  been 
about  7h%  advance.  Now,  supposing  this  to  be  the  real, 
and  not  merely,  as  it  is,  the  nominal  par  of  exchange, 
between  us  and  England,  what  would  it  prove  ?  No- 
thing, except  that  funds  were  wanted  in  England  for 
commercial  operations,  to  be  carried  on  either  in  Eng- 
land or  elsewhere.  It  would  not  necessarily  show  that 
we  were  indebted  to  England,  for,  if  we  had  occasion  to 
l)ay  debts  in  Russia  or  Holland,  funds  in  England 
would  naturally  enough  be  required  for  such  a  purpose. 
And  even  if  it  did  prove  that  a  balance  was  due  Eng- 
land at  the  moment,  it  would  have  no  tendency  to  ex- 
])lain  to  us  whether  our  commerce  with  England  had 
been  profitable  or  unprofitable. 

But  it  is  not  true,  in  point  of  fact,  that  the  real  price 
of  exchange  is  7^%  advance,  nor,  indeed,  that  there  is 
at  the  present  moment  any  advance  at  all.  That  is  to 
say,  it  is  not  true  that  merchants  will  give  such  an  ad- 
vance, or  any  advance,  for  money  in  England,  more 
than  they  would  give  for  the  same  amount,  in  the  same 
currency,  here.     It  will  strike  every  one  who  reflects 


SPEECH   OF  1824.  359 

upon  it,  that,  if  there  were  a  real  difference  of  7^%, 
money  would  be  immediately  shipped  to  England ;  be- 
cause the  expense  of  transportation  would  be  far  less 
than  that  difference.  Or  commodities  of  trade  would 
be  shipped  to  Europe  and  the  proceeds  remitted  to  Eng- 
land. If  it  could  so  happen,  that  American  merchants 
should  be  willing  to  pay  10%  premium  for  money  in 
England,  or,  in  other  words,  that  a  real  difference  to 
that  amount,  in  the  exchange,  should  exist,  its  effects 
would  be  immediately  seen  in  new  shipments  of  our 
own  commodities  to  Europe,  because  this  state  of  things 
would  create  new  motives.  A  cargo  of  tobacco,  for  ex- 
ample, might  sell  at  Amsterdam  for  the  same  price  as 
before  ;  but  if  its  proceeds  when  remitted  to  London 
were  advanced,  as  they  would  be  in  such  case,  ten  per 
cent  by  the  state  of  exchange,  this  would  be  so  much 
added  to  the  price,  and  would  operate,  therefore,  as  a 
motive  for  the  exportation  ;  and  in  this  way,  national 
balances  are,  and  always  will  be,  adjusted. 

To  form  any  accurate  idea  of  the  true  state  of  ex- 
change between  two  countries,  we  must  look  at  their 
currencies,  and  compare  the  quantities  of  gold  and  silver 
which  they  may  respectively  represent.  This  usually 
explains  the  state  of  the  exchanges ;  and  this  will  satis- 
factorily account  for  the  apparent  advance  now  existing 
on  bills  drawn  on  England.  The  English  standard  of 
value  is  gold ;  with  us,  that  office  is  performed  by  gold, 
and  by  silver  also,  at  a  fixed  relation  to  each  other. 
But  our  estimate  of  silver  is  rather  higher,  in  proportion 
to  gold,  than  most  nations  give  it ;  it  is  higher,  espe- 
cially, than  in  England,  at  the  present  moment.  The 
consequence  is,  that  silver,  which  remains  a  legal  cur- 
rency with  us,  stays  here,  while  the  gold  has  gone 
abroad ;  verifying  the  universal  truth,  that,  if  two  cur- 
rencies be  allowed  to  exist,  of  different  values,  that 
which  is  cheapest  will   fill  up  the  whole   circulation. 


360  DANIEL  WEBSTER. 

For  as  much  gold  as  will  suffice  to  pay  here  a  debt  of  a 
given  amount,  we  can  buy  in  England  more  silver  than 
would  be  necessary  to  pay  the  same  debt  here  ;  and 
from  this  difference  in  the  value  of  silver  arises  wholly, 
or  in  a  great  measure,  the  present  apparent  difference 
in  exchange.  Spanish  dollars  sell  now,  in  England,  for 
As.  9d.  stg.  per  ounce ,;  equal  to  $1.06.  By  our  standard, 
the  same  ounce  is  worth  $1.16;  being  a  difference  of 
about  9%.  The  true  par  of  exchange,  therefore,  is  9%. 
If  a  merchant  here  pay  100  Spanish  dollars  for  a  bill 
on  England,  at  nominal  par,  in  sterling  money,  that  is, 
for  a  bill  of  £22  10*-.,  the  proceeds  of  this  bill,  when 
paid  in  England,  in  the  legal  currency,  will  there  pur- 
chase, at  the  present  price  of  silver,  109  Spanish  dollars. 
Therefore,  if  the  nominal  advance  on  English  bills  do 
not  exceed  9%,  the  real  exchange  is  not  against  this 
country ;  in  other  words,  it  does  not  show  that  there  is 
any  pressing  or  particular  occasion  for  the  remittance 
of  funds  to  England. 

As  little  can  be  inferred  from  the  occasional  transfer 
of  United  States  stock  to  England.  Considering  the 
interest  paid  on  our  stocks,  the  entire  stability  of  our 
credit,  and  the  accumulation  of  capital  in  England,  it  is 
not  at  all  wonderful  that  investments  should  occasion- 
ally be  made  in  our  funds.  As  a  sort  of  countervailing 
fact,  it  may  be  stated  that  English  stocks  are  now 
actually  holden  in  this  country,  though  probably  not  to 
any  considerable  amount. 

I  will  now  proceed,  sir,  to  state  some  objections  which 
I  feel,  of  a  more  general  nature,  to  the  course  of  Mr. 
Speaker's  observations. 

He  seems  to  me  to  argue  the  question  as  if  all  do- 
mestic industry  were  confined  to  the  production  of 
manvifactured  articles  ;  as  if  the  employment  of  our 
own  capital,  and  our  own  labor,  in  the  occupations  of 
commerce   and   navigation,   were   not  as  emphatically 


SPEECH  OF  1824.  361 

domestic  industry  as  any  other  occupation.  Some  other 
gentlemen,  in  the  course  of  the  debate,  have  spoken  of 
the  price  paid  for  every  foreign  manufactured  article 
as  so  much  given  for  the  encouragement  of  foreign  labor, 
to  the  prejudice  of  our  own.  But  is  not  every  such 
article  the  product  of  our  own  labor  as  truly  as  if  we 
had  manufactured  it  ourselves  ?  Our  labor  has  earned 
it,  and  paid  the  price  for  it.  It  is  so  much  added  to  the 
stock  of  national  wealth.  If  the  commodity  were  dol- 
lars, nobody  would  doubt  the  truth  of  this  remark  ;  and 
it  is  precisely  as  correct  in  its  application  to  any  other 
commodity  as  to  silver.  One  man  makes  a  yard  of 
cloth  at  home  ;  another  raises  agricultural  products,  and 
buys  a  yard  of  imported  cloth.  Both  these  are  equally 
the  earnings  of  domestic  industry,  and  the  only  ques- 
tions that  arise  in  the  case  are  two :  the  first  is,  which 
is  the  best  mode,  under  all  the  circumstances,  of  obtain- 
ing the  article ;  the  second  is,  how  far  this  question 
is  proper  to  be  decided  by  government,  and  how  far  it  is 
proper  to  be  left  to  individual  discretion.  There  is  no 
foundation  for  the  distinction  which  attributes  to  certain 
emplojnnents  the  peculiar  appellation  of  American  in- 
dustry ;  and  it  is,  in  my  judgment,  extremely  unwise 
to  attempt  such  discriminations. 

We  are  asked,  what  nations  have  ever  attained  emi- 
nent prosperity  without  encouraging  manufactures  ?  I 
may  ask,  what  nation  ever  reached  the  like  prosperity 
without  promoting  foreign  trade  ?  I  regard  these  inter- 
ests as  closely  connected,  and  am  of  opinion  that  it 
should  be  our  aim  to  cause  them  to  flourish  together.  I 
know  it  would  be  very  easy  to  promote  manufactures, 
at  least  for  a  time,  but  probably  only  for  a  short  time, 
if  we  might  act  in  disregard  of  other  interests.  We 
could  cause  a  sudden  transfer  of  capital,  and  a  violent 
change  in  the  pursuits  of  men.  We  could  exceedingly 
benefit  some  classes  by  those  means.     But  what,  then, 


3G2  DANIEL  WEBSTER. 

becomes  of  the  interests  of  others  ?  The  power  of  col- 
lecting revenue  by  duties  on  imports,  and  the  habit  of 
the  government  of  collecting  almost  its  whole  revenue 
in  that  mode,  will  enable  us,  without  exceeding  the 
bounds  of  moderation,  to  give  great  advantages  to  those 
classes  of  manufactures  which  we  may  think  most 
useful  to  promote  at  home.  What  I  object  to  is  the 
immoderate  use  of  the  power,  —  exclusions  and  prohi- 
bitions ;  all  of  which,  as  I  think,  not  only  interrupt  the 
pursuits  of  individuals,  with  great  injury  to  themselves, 
and  little  or  no  benefit  to  the  country,  but  also  often 
divert  our  own  labor,  or,  as  it  may  very  properly  be 
called,  our  own  domestic  industry,  from  those  occupa- 
tions in  which  it  is  well  employed  and  well  paid,  to 
others  in  which  it  will  be  worse  employed  and  worse 
paid.  ~For  my  part,  I  see  very  little  relief  to  those  who 
are  likely  to  be  deprived  of  their  employments,  or  who 
find  the  prices  of  the  commodities  which  they  need, 
raised,  in  any  of  the  alternatives  which  Mr.  S^peaker  has 
presented.  It  is  notliing  to  say  that  they  may,  if  they 
choose,  continue  to  buy  the  foreign  article  j  the  answer 
is,  the  price  is  augmented :  nor  that  they  may  use  the 
domestic  article ;  the  price  of  that  also  is  increased.  Nor 
can  they  supply  themselves  by  the  substitution  of  their 
own  fabric.  How  can  the  agriculturist  make  his  own 
iron  ?     How  can  the  shipowner  grow  his  own  hemp  ? 

But  I  have  a  yet  stronger  objection  to  the  course  of 
Mr.  Speaker's  reasoning;  which  is,  that  he  leaves  out 
of  the  case  all  that  has  been  already  done  for  the  pro- 
tection of  manufactures,  and  argues  the  question  as  if 
those  interests  were  now,  for  the  first  time,  to  receive 
aid  from  duties  on  imports.  I  can  hardly  express  the 
surprise  I  feel  that  Mr.  Speaker  should  fall  into  the 
common  modes  of  expression  used  elsewhere,  and  ask 
if  we  will  give  our  manufacturers  no  protection.  Sir, 
look  to  the  history  of  our  laws ;  look  to  the  present 


SPEECH  OF  1824.  368 

state  of  our  laws.  Consider  that  our  whole  revenue, 
with  a  trifling  exception,  is  collected  at  the  custom- 
house, and  always  has  been;  and  then  say  what  pro- 
priety there  is  in  calling  on  the  government  for 
protection,  as  if  no  protection  had  heretofore  been 
afforded.  Tlie  real  question  before  us,  in  regard  to  all 
the  important  clauses  of  the  bill,  is  not  whether  we  will 
lay  duties,  but  whether  we  will  augment  duties.  The 
demand  is  for  something  more  than  exists,  and  yet  it  is 
pressed  as  if  nothing  existed.  It  is  wholly  forgotten 
that  iron  and  hemp,  for  example,  already  pay  a  very 
heavy  and  burdensome  duty ;  and,  in  short,  from  the 
general  tenor  of  Mr.  Speaker's  observations,  one  would 
infer  that,  hitherto,  we  had  rather  taxed  our  own  manu- 
factures than  fostered  them  by  taxes  on  those  of  other 
countries.  We  hear  of  the  fatal  policy  of  the  tariff  of 
1816 ;  and  yet  the  law  of  1816  was  passed  avowedly  for 
the  benefit  of  manufacturers,  and,  with  very  few  excep- 
tions, imposed  on  imported  articles  very  great  additions 
of  tax ;  in  some  important  instances,  indeed,  amounting 
to  a  prohibition. 

Sir,  on  tliis  subject  it  becomes  us  at  least  to  under- 
stand the  real  posture  of  the  question.  Let  us  not 
suppose  that  we  are  beginning  the  protection  of  manu- 
factures, by  duties  on  imports.  What  we  are  asked  to 
do  is,  to  render  those  duties  much  higher,  and  therefore, 
instead  of  dealing  in  general  commendations  of  the 
benefits  of  protection,  the  friends  of  the  bill,  I  think, 
are  bound  to  make  out  a  fair  case  for  each  of  the  manu- 
factures which  they  propose  to  benefit.  The  govern- 
ment has  already  done  much  for  their  protection,  and 
it  ought  to  Tje  presumed  to  have  done  enough,  unless  it 
be  shown,  by  the  facts  and  considerations  apjjlicable  to 
each,  that  there  is  a  necessity  for  doing  more. 

On  the  general  question,  sir,  allow  me  to  ask  if  the 
doctrine  of  prohibition,   as  a  general  doctrine,  be  not 


364  DANIEL  WEBSTER. 

])i'eiiosterous  ?  Suppose  all  nations  to  act  upon  it ;  they 
would  be  prosperous,  then,  according  to  the  argument, 
precisely  in  the  proportion  in  which  they  abolished  in- 
tercourse with  one  another.  The  less  of  mutual  com- 
merce the  better,  upon  this  hypothesis.  Protection  and 
encouragement  may  be,  and  are,  doubtless,  sometimes, 
wise  and  beneficial,  if  kept  within  proper  limits ;  but, 
when  carried  to  an  extravagant  height,  or  the  point  of 
l)rohibition,  the  absurd  character  of  the  system  mani- 
fests itself.  Mr.  Speaker  has  referred  to  the  late 
Emperor  Napoleon,  as  having  attempted  to  naturalize 
the  manufacture  of  cotton  in  France.  He  did  not  cite 
a  more  extravagant  part  of  the  projects  of  that  ruler, 
that  is,  his  attempt  to  naturalize  the  growth  of  that 
plant  itself  in  France;  whereas,  we  have  understood 
that  considerable  districts  in  the  south  of  France,  and 
in  Italy,  of  rich  and  productive  lands,  were  at  one  time 
withdrawn  from  profitable  uses,  and  devoted  to  raising, 
at  great  expense,  a  little  bad  cotton.  ISTor  have  we  been 
referred  to  the  attempts,  under  the  same  system,  to 
make  sugar  and  coffee  from  common  culinary  vegetables ; 
attempts  which  served  to  fill  the  print  shops  of  Europe, 
and  to  show  us  how  easy  is  the  transition  from  what 
some  think  sublime,  to  that  which  all  admit  to  be 
ridiculous.  The  folly  of  some  of  these  projects  has  not 
been  surpassed,  nor  hardly  equaled,  unless  it  be  by  the 
philosopher  in  one  of  the  satires  of  Swift,  who  so  long 
labored  to  extract  sunbeams  from  cucumbers. 

The  poverty  and  unhappiness  of  Spain  have  been 
attributed  to  the  want  of  protection  to  her  own  industry. 
If  by  this  it  be  meant  that  the  poverty  of  Spain  is  owing 
to  bad  government  and  bad  laws,  the  remark  is,  in  a 
great  measure,  just.  But  these  very  laws  are  bad 
because  they  are  restrictive,  partial,  and  prohibitory. 
If  prohibition  were  protection,  Spain  would  seem  to 
have  had  enough  of  it.     Nothing  can  exceed  the  bar- 


SPEECH  OF  1S24.  365 

barous  rigidity  of  her  colonial  system,  or  the  folly  of 
her  early  commercial  regulations.  Unenlightened  and 
bigoted  legislation,  the  multitude  of  holidays,  miserable 
roads,  monopolies  on  the  part  of  government,  restrictive 
laws,  that  ought  long  since  to  have  been  abrogated,  are 
generally,  and  I  believe  truly,  reckoned  the  principal 
causes  of  the  bad  state  of  the  productive  industry  of 
Spain.  Any  partial  improvement  in  her  condition,  or 
increase  of  her  prosperity,  has  been,  in  all  cases,  the 
result  of  relaxation,  and  the  abolition  of  what  was  in- 
tended for  favor  and  protection. 

In  short,  sir,  the  general  sense  of  this  age  sets,  with 
a  strong  current,  in  favor  of  freedom  of  commercial 
intercourse,  and  unrestrained  individual  action.  Men 
yield  up  their  notions  of  monopoly  and  restriction,  as 
they  yield  up  other  prejudices,  slowly  and  reluctantly ; 
but  they  cannot  withstand  the  general  tide  of  opinion. 

Let  me  now  ask,  sir,  what  relief  this  bill  proposes 
to  some  of  those  great  and  essential  interests  of  the 
country,  the  condition  of  which  has  been  referred  to  as 
proof  of  national  distress  ;  and  which  condition,  although 
I  do  not  think  it  makes  out  a  case  of  distress,  yet  does 
indicate  depression. 

And  first,  sir,  as  to  our  foreign  trade.  Mr.  Speaker 
has  stated  that  there  has  been  a  considerable  falling  ofE 
in  the  tonnage  employed  in  that  trade.  This  is  true, 
lamentably  true.  In  my  opinion,  it  is  one  of  those 
occurrences  which  ought  to  arrest  our  immediate,  our 
deep,  our  most  earnest  attention.  What  does  this  bill 
propose  for  its  relief  ?  Sir,  it  proposes  nothing  but  new 
burdens.  It  proposes  to  diminish  its  employment,  and 
it  proposes,  at  the  same  time,  to  augment  its  expense, 
by  subjecting  it  to  heavier  taxation.  Sir,  there  is  no 
interest  in  regard  to  which  a  stronger  case  for  pro- 
tection can  be  made  out  than  the  navigating  interest. 
Whether  we  look  at  its   present   condition,  which  is 


366  DANIEL  WEBSTER. 

acliuitted  to  be  depressed  ;  the  number  of  persons  con- 
nected with  it,  and  dependent  upon  it  for  their  daily 
bread ;  or  its  imj^ortance  to  the  country  in  a  political 
point  of  view,  it  has  claims  upon  our  attention  which 
cannot  be  exceeded.  But  what  do  we  propose  to  do  for 
it  ?  I  repeat,  sir,  simply  to  burden  and  to  tax  it.  By 
a  statement  which  I  have  already  submitted  to  the 
Committee,  it  appears  that  the  shipping  interest  pays, 
annually,  more  than  half  a  million  dollars  in  duties  on 
articles  used  in  the  construction  of  ships.  We  propose 
to  add  nearly,  or  quite,  fifty  per  cent  to  this  amount,  at 
the  very  moment  that  we  bring  forth  the  languishing 
state  of  this  interest  as  a  proof  of  national  distress.  Let 
it  be  remembered  that  our  shipping  employed  in  foreign 
commerce  has,  at  this  moment,  not  the  shadow  of  gov- 
ernment protection.  It  goes  abroad  upon  the  wide  sea 
to  make  its  own  way,  and  earn  its  own  bread,  in  a  pro- 
fessed competition  with  the  whole  world.  Its  resources 
are  its  own  frugality,  its  own  skill,  its  own  enterprise. 
It  hopes  to  succeed,  if  it  shall  succeed  at  all,  not  by 
extraordinary  aid  of  government,  but  by  patience,  vigi- 
lance, and  toil.  This  right  arm  of  the  nation's  safety 
strengthens  its  own  muscle  by  its  own  efforts,  and  by 
unwearied  exertion  in  its  own  defense  becomes  strong 
for  the  defense  of  the  country. 

ISTo  one  acquainted  with  this  interest  can  deny  that 
its  situation  at  this  moment  is  extremely  critical.  We 
have  left  it  hitherto  to  maintain  itself  or  perish,  to 
swim  if  it  can,  and  to  sink  if  it  cannot.  But  at  this 
moment  of  its  apparent  struggle  can  we,  as  men,  can 
we,  as  patriots,  add  another  stone  to  the  weight  that 
threatens  to  carry  it  down  ?  Sir,  there  is  a  limit  to 
human  power  and  to  human  effort.  I  know  the  com- 
mercial marine  of  this  country  can  do  almost  every- 
thing, and  bear  almost  everything.  Yet  some  things 
are  impossible  to  be  done,  and  some  burdens  may  be 


Speech  of  is24.  367 

impossible  to  be  borne  ;  and  as  it  waS  the  last  ounce 
that  broke  the  back  of  the  camel,  so  the  last  tax,  al- 
though it  were  even  a  small  one,  may  be  decisive  as  to 
the  power  of  our  marine  to  sustain  the  conflict  in  which 
it  is  now  engaged  with  all  the  commercial  nations  on 
the  globe. 

Again,  Mr.  Chairman,  the  failures  and  the  bankrupt- 
cies which  have  taken  place  in  our  large  cities  have 
been  mentioned  as  proving  the  little  success  attending 
commerce,  and  its  general  decline.  But  this  bill  has  no 
balm  for  those  wounds.  It  is  very  remarkable  that, 
when  losses  and  disasters  of  certain  manufacturers  — 
those  of  iron,  for  instance  —  are  mentioned,  it  is  done 
for  the  purpose  of  invoking  aid  for  the  distressed.  Not 
so  with  the  losses  and  disasters  of  commerce ;  these  last 
are  narrated,  and  not  unfrequently  much  exaggerated, 
to  prove  the  ruinous  nature  of  the  employment,  and  to 
show  that  it  ought  to  be  abandoned,  and  the  capital  en- 
gaged in  it  turned  to  other  objects. 

It  has  been  often  said,  sir,  that  our  manufactures 
have  to  contend,  not  only  against  the  natural  advantages 
of  those  who  produce  similar  articles  in  foreign  coun- 
tries, but  also  against  the  action  of  foreign  govern- 
ments, who  have  great  political  interest  in  aiding  their 
own  manufactures  to  suppress  ours.  But  have  not  these 
governments  as  great  an  interest  to  cripple  our  marine, 
by  preventing  the  growth  of  our  commerce  and  navi- 
gation? What  is  it  that  makes  us  the  object  of  the 
highest  respect,  or  the  most  suspicious  jealousy,  to 
foreign  states  ?  What  is  it  that  most  enables  us  to 
take  high  relative  rank  among  the  nations  ?  I  need 
not  say  that  this  results,  more  than  from  anything  else, 
from  that  quantity  of  military  power  which  we  can 
cause  to  be  water  borne,  and  of  that  extent  of  commerce 
which  we  are  able  to  maintain  throughout  the  world. 

Mr.  Chairman,  I  am  conscious  of  having  detained  the 


368  DANIEL  WEBSTER. 

Committee  much  too  long  with  tliese  observations.  My 
apology  for  now  proceeding  to  some  remarks  upon  the 
particular  clauses  of  the  bill  is  that,  representing  a  dis- 
trict at  once  commercial  and  highly  manufacturing,  and 
being  called  upon  to  vote  upon  a  bill  containing  provi- 
sions so  numerous  and  so  various,  I  am  naturally  desirous 
to  state  as  w^ell  what  I  approve  as  what  I  would  reject. 

The  first  section  proposes  an  augmented  duty  upon 
woollen  manufactures.  This,  if  it  were  unqualified, 
would  no  doubt  be  desirable  to  those  who  are  engaged 
in  that  business.  I  have  myself  presented  a  petition 
from  the  woollen  manufacturers  of  Massachusetts,  pray- 
ing an  augmented  ad  valorem  duty  upon  imported  wool- 
len cloths,  and  I  am  prepared  to  accede  to  that  proposi- 
tion to  a  reasonable  extent.  But  then  this  bill  proposes, 
also,  a  very  high  duty  upon  imported  wool ;  and,  as  far 
as  I  can  learn,  a  majority  of  the  manufacturers  are  at 
least  extremely  doubtful  whether,  taking  these  two 
provisions  together,  the  state  of  the  law  is  not  better 
for  them  now  than  it  would  be  if  this  bill  should  pass. 
It  is  said  this  tax  on  raw  wool  will  benefit  the  agricul- 
turist ;  but  I  know  it  to  be  the  opinion  of  some  of  the 
best  informed  of  that  class  that  it  will  do  them  more 
hurt  than  good.  They  fear  it  will  check  the  manufac- 
turer, and  consequently  check  his  demand  for  their 
article.  The  argument  is,  that  a  certain  quantity  of 
coarse  wool,  cheaper  than  we  can  possibly  furnish,  is 
necessary  to  enable  the  manufacturer  to  carry  on  the 
general  business,  and  that  if  this  cannot  be  had  the  con- 
sequence will  be  not  a  greater,  but  a  less,  manufacture 
of  our  own  wool.  I  am  aware  that  very  intelligent 
persons  differ  upon  this  point ;  but,  if  we  may  safely 
infer  from  that  difference  of  opinion  that  the  proposed 
benefit  is  at  least  doubtful,  it  would  be  prudent  perhaps 
to  abstain  from  the  experiment.  Certain  it  is  that  the 
same  course  of  reasoning  has  occurred,  as  I  have  before 


SPEECH  OF  1824.  369 

stated,  on  the  same  subject,  when  a  renewed  application 
was  made  to  the  English  Parliament  to  repeal  the  duty 
on  imported  wool,  I  believe  scarcely  two  months  ago  ; 
those  who  support  the  application  pressing  urgently 
the  necessity  of  an  unrestricted  use  of  the  cheap,  im- 
ported raw  material,  with  a  view  to  supply  with  coarse 
cloths  the  markets  of  warm  climates,  such  as  those  of 
Egypt  and  Turkey,  and  especially  a  vast  new  created 
demand  in  the  South  American  states. 

As  to  the  manufactures  of  cotton,  it  is  agreed,  I  be- 
lieve, that  they  are  generally  successful.  It  is  under- 
stood that  the  present  existing  duty  operates  pretty 
much  as  a  prohibition  over  those  descriptions  of  fabrics 
to  which  it  api)lies.  The  proposed  alteration  would 
probably  enable  the  American  manufacturer  to  com- 
mence competition  with  higher-priced  fabrics  ;  and  so 
would,  perhaps,  an  augmentation  less  than  is  here  pro- 
posed. I  consider  the  cotton  manufactures  not  only  to 
have  reached,  but  to  have  passed,  the  point  of  competi- 
tion. I  regard  their  success  as  certain,  and  their  growth 
as  rapid  as  the  most  impatient  could  well  expect.  If, 
however,  a  provision  of  the  nature  of  that  recommended 
here  were  thought  necessary  to  commence  new  opera- 
tions in  the  same  line  of  manufacture,  I  should  cheer- 
fully agree  to  it,  if  it  were  not  at  the  cost  of  sacrificing 
other  great  interests  of  the  country.  I  need  hardly  say 
that  whatever  promotes  the  cotton  and  woollen  manu- 
factures promotes  most  important  interests  of  my  con- 
stituents. They  have  a  great  stake  in  the  success  of 
those  establishments,  and  as  far  as  those  manufactures 
are  concerned,  would  be  as  much  benefited  by  the  pro- 
visions of  this  bill  as  any  part  of  the  community.  It  is 
obvious,  too,  I  should  think,  that  for  some  considerable 
time  manufactures  of  this  sort,  to  whatever  magnitude 
they  may  rise,  will  be  principally  established  in  those 
parts  of  the  country  where  i)opulation  is  most  dense, 


370  Daniel  webster. 

('a})ital  most  abundant,  and  where  the  most  successful 
beginnings  have  been  already  made. 

But  if  these  be  thought  to  be  advantages,  they  are 
greatly  counterbalanced  by  other  advantages  enjoyed  by 
other  portions  of  the  country.  I  cannot  but  regard  the 
situation  of  the  West  as  highly  favorable  to  human 
happiness.  It  offers,  in  the  abundance  of  its  new  and 
fertile  lands,  such  assurances  of  permanent  property 
and  respectability  to  the  industrious,  it  enables  them  to 
lay  such  sure  foundations  for  a  competent  provision  for 
their  families,  it  makes  such  a  nation  of  freeholders, 
that  it  need  not  envy  the  happiest  and  most  prosperous 
of  the  manufacturing  communities.  We  may  talk  as 
we  will  of  well-fed  and  well-clothed  day-laborers  or 
journeymen  ;  they  are  not,  after  all,  to  be  compared, 
either  for  happiness  or  respectability,  with  him  who 
sleeps  under  his  own  roof  and  cultivates  his  own  fee- 
simple  inheritance. 

With  respect  to  the  proposed  duty  on  glass  I  would 
observe  that,  upon  the  best  means  of  judging  which 
I  possess,  I  am  of  opinion  that  the  chairman  of  the 
committee  is  right  in  stating  that  there  is  in  effect  a 
boimty  upon  the  exportation  of  the  British  article.  I 
think  it  entirely  proper,  therefore,  to  raise  our  own 
duty  by  such  an  amount  as  shall  be  equivalent  to  that 
bounty. 

And  here,  Mr.  Chairman,  before  proceeding  to  those 
parts  of  the  bill  to  which  I  most  strenuously  object,  I 
will  be  so  presumptuous  as  to  take  up  a  challenge  which 
Mr.  Speaker  has  thrown  down.  He  has  asked  us,  in  a 
tone  of  interrogatory  indicative  of  the  feeling  of  antici- 
pated triumph,  to  mention  any  country  in  which  manu- 
factures have  flourished  without  the  aid  of  proliibitory 
laws.  He  has  demanded  if  it  be  not  policy,  protection, 
ay,  and  prohibition,  that  have  carried  other  states  to 
the  height  of  their  prosperity,  and  whether  any  one  has 


SPEECH  OF  1824.  371 

succeeded  with  such  tame  and  inert  legislation  as  ours. 
Sir,  I  am  ready  to  answer  this  inquiry. 

There  is  a  country  not  undistinguished  among  the 
nations,  in  which  the  progress  of  manufactures  has  been 
far  more  rapid  than  in  any  other,  and  yet  unaided  by 
prohibitions  or  unnatural  restrictions.  That  country, 
the  happiest  which  the  sun  shines  on,  is  our  own. 

The  woollen  manufactures  of  England  have  existed 
from  the  early  ages  of  the  monarchy.  Provisions,  de- 
signed to  aid  and  foster  them,  are  in  the  blackletter 
statutes  of  the  Edwards  and  the  Henrys.  Ours,  on  the 
contrary,  are  but  of  yesterday  ;  and  yet,  with  no  more 
than  the  protection  of  existing  laws,  they  are  already 
at  the  point  of  close  and  promising  competition.  Sir, 
nothing  is  more  unphilosophical  than  to  refer  us,  on 
these  subjects,  to  the  policy  adopted  by  other  nations 
in  a  very  different  state  of  society,  or  to  infer  that  what 
was  judged  expedient  by  them,  in  their  early  history, 
must  also  be  expedient  for  us  in  this  early  part  of  our 
own.  This  would  be  reckoning  our  age  chronologically, 
and  estimating  our  advance  by  our  number  of  years, 
when,  in  truth,  we  should  regard  only  the  state  of  so- 
ciety, the  knowledge,  the  skill,  the  capital,  the  enter- 
prise, which  belong  to  our  times.  We  have  been  trans- 
ferred from  the  stock  of  Europe,  in  a  comparatively 
enlightened  age,  and  our  civilization  and  improvement 
date  back  as  early  as  her  own.  Her  original  history  is 
also  our  original  history  ;  and  if,  since  the  moment  of 
separation,  she  has  gone  ahead  of  us  in  some  respects, 
it  may  be  said,  without  violating  truth,  that  we  have 
kept  up  in  others,  and  in  others  again  are  ahead  our- 
selves. We  are  to  legislate,  then,  with  regard  to  the 
present  actual  state  of  society  ;  and  our  own  experience 
shows  us  that  commencing  manufactures  at  the  present 
highly  enlightened  and  emulous  moment,  we  need  not 
imitate  the  clumsy  helps  with  which,  in  less  auspicious 


372  DANIEL  WEBSTER. 

times,  govornnieiits  have  souglit  to  enable  the  ingenuity 
and  industry  of  their  people  to  hobble  along. 

The  English  cotton  manufactures  began  about  tlie 
commencement  of  the  last  reign.  Ours  can  hardly  be 
said  to  have  commenced,  with  any  earnestness,  until 
the  application  of  the  power  loom,  -in  1814,  not  more 
than  ten  years  ago.  Now,  sir,  I  hardly  need  again 
speak  of  its  progress,  its  present  extent,  or  its  assurance 
of  future  enlargement.  In  some  sorts  of  fabrics  we  are 
already  exj^orters,  and  the  products  of  our  factories 
are  at  this  moment  in  the  South  American  markets. 
We  see,  then,  what  can  be  done  without  prohibition  or 
extraordinary  protection,  because  we  see  what  has  been 
done  ;  and  I  venture  to  predict  that  in  a  few  years  it 
will  be  thought  wonderful  that  these  branches  of  manu- 
factures at  least  should  have  been  thought  to  require 
additional  aid  from  government. 

Mr.  Chairman,  the  l)est  apology  for  laws  of  prohibi- 
tion and  laws  of  monopoly  will  be  found  in  that  state 
of  society,  not  only  unenlightened  but  sluggish,  in  which 
they  are  most  generally  established.  Private  industry 
in  those  days  required  strong  provocatives,  which  gov- 
ernments were  seeking  to  administer  by  these  means. 
Something  was  wanted  to  actuate  and  stimulate  men, 
and  the  prospects  of  such  profits  as  would,  in  our  times, 
excite  unbounded  competition,  would  hardly  move  the 
sloth  of  former  ages.  In  some  instances,  no  doubt, 
these  laws  produced  an  effect  which,  in  that  period, 
would  not  have  taken  place  without  them.  But  our 
age  is  wholly  of  a  different  character,  and  its  legislation 
takes  another  turn.  Society  is  full  of  excitement ;  com- 
petition comes  in  place  of  nu^nopoly,  and  intelligence 
and  industry  ask  only  for  fair  play  and  an  open  field. 
Profits,  indeed,  in  such  a  state  of  things  will  be  small, 
but  they  will  be  extensively  diffused,  prices  will  be  low, 
and  the  great  body  of  the  people  prosperous  and  happy. 


SPEECH  OF  1824.  373 

It  is  worthy  of  remark  that  from  the  operation  of  these 
causes  commercial  wealth,  while  it  is  increased  beyond 
calculation  in  its  general  aggregate,  is,  at  the  same  time, 
broken  and  diminished  in  its  subdivisions.  Commercial 
prosperity  should  be  judged  of  therefore  rather  from 
the  extent  of  trade  than  from  the  magnitude  of  its  ap- 
parent profits.  It  has  been  remarked  that  Spain,  cer- 
tainly one  of  the  poorest  nations,  made  very  great  profits 
on  the  amount  of  her  trade,  but  with  little  other  bene- 
fit than  the  enriching  of  a  few  individuals  and  compa- 
nies. Profits  to  the  English  merchants  engaged  in  the 
Levant  and  Turkey  trade  were  formerly  very  great,  and 
there  were  richer  merchants  in  England  some  centuries 
ago,  considering  the  comparative  value  of  money,  than 
at  the  present  highly  commercial  period.  When  the 
diminution  of  profits  arises  from  the  extent  of  compe- 
tition, it  indicates  rather  a  salutary  than  an  injurious 
change.^ 

The  true  course  then,  sir,  for  us  to  pursue  is,  in  my 
opinion,  to  consider  what  our  situation  is,  what  our 
means  are,  and  how  they  can  be  best  applied.  What 
amount  of  population  have  we  in  comparison  with  our 
extent  of  soil,  what  amount  of  capital,  and  labor  at  what 
price  ?  As  to  skill,  knowledge,  and  enterprise,  we  may 
safely  take  it  for  granted  that,  in  these  particulars,  we 
are  on  an  equality  with  others.     Keeping  these  consid- 

1  "  The  present  equable  diffusion  of  moderate  wealth  cannot  be 
better  illustrated  than  by  remarking'  that  in  this  age  many  palaces 
and  superb  mansions  have  been  pulled  down  or  converted  to  other 
purposes,  while  none  have  been  erected  on  a  like  scale.  The  number- 
less baronial  castles  and  mansions  in  all  parts  of  England,  now  in 
ruins,  may  all  be  adduced  as  examples  of  the  decrease  of  inordinate 
w-ealth.  On  the  other  hand,  the  multiplication  of  commodious  dwell- 
ings for  the  iipper  and  middle  classes  of  society,  and  the  increased 
comforts  of  all  ranks,  exhibit  a  picture  of  individual  happiness  un- 
known in  any  other  age."  —  Sir  G.  Slant's  Letter  to  Lord  Spencer,  in 
1800. 


374  DANIEL  WEBSTER. 

erations  in  view,  allow  ine  to  examine  two  or  three  of 
those  provisions  of  the  bill  to  which  I  feel  the  strongest 
objections. 

To  begin  with  the  article  of  iron.  Our  whole  annual 
consumption  of  this  article  is  supposed  by  the  Chairman 
of  the  Committee  to  be  48,000  or  50,000  tons.  Let  us 
suppose  the  latter.  The  amount  of  our  own  manufac- 
ture he  estimates,  I  think,  at  17,000  tons.  The  present 
duty  on  the  im})orted  article  is  $15  per  ton,  and  as  this 
duty  causes  of  course  an  equivalent  augmentation  of 
the  price  of  the  home  manufacture,  the  whole  increase 
of  price  is  equal  to  $750,000  annually.  This  sum  we 
pay  on  a  raw  material,  and  on  an  absokite  necessary  of 
life.  The  bill  proposes  to  raise  the  duty  from  $15  to 
$22.50  per  ton,  which  would  be  equal  to  $1,125,000  on 
the  whole  annual  consumption.  So  that,  suppose  the 
point  of  prohibition  which  is  aimed  at  by  some  gentle- 
men to  be  attained,  the  consumers  of  the  article  would 
pay  this  last  mentioned  sum  every  year  to  the  producers 
of  it,  over  and  above  the  price  at  which  they  could 
supply  themselves  with  the  same  article  from  other 
sources.  There  would  be  no  mitigation  of  this  burden, 
except  from  the  prospect,  whatever  that  might  be,  tluit 
iron  would  fall  in  value  by  domestic  competition  after 
the  importation  should  be  prohibited.  It  will  be  easy, 
I  think,  to  show  that  it  cannot  fall ;  and  supposing  for 
the  present  that  it  shall  not,  the  result  will  be  that  we 
shall  pay  annually  a  sum  of  $1,125,000,  constantly 
augmented,  too,  by  increased  consumption  of  the  article, 
to  sujijiort  a  business  that  cannot  support  Itself. 

It  is  of  no  consequence  to  the  argument  that  this  sum 
is  expended  at  home  ;  so  it  would  be  if  we  taxed  the 
})eople  to  support  any  other  useless  and  expensive  es- 
tablishment —  to  build  another  Capitol,  for  example,  or 
incur  an  unnecessary  expense  of  any  sort.  The  question 
still  is,  are  the  money,  time,  and  labor  well  laid  out  in 


SPEECH  OF  1824.  375 

these  cases  ?  The  present  price  of  iron  at  Stockhohn, 
I  am  assured  by  importers,  is  $53  per  ton  on  board,  $48 
in  the  yard  before  loading,  and  probably  not  far  from 
$40  at  the  mines.  Freight,  insurance,  etc.,  may  be  fairly 
estimated  at  $15,  to  which  add  our  present  duty  of  $15 
more,  and  these  two  last  sums,  together  with  the  cost 
on  board  at  Stockholm,  give  $83  as  the  cost  of  Swedes 
iron  in  our  market.  In  fact,  it  is  said  to  have  been 
sold  last  year  at  $81.50  to  $82  per  ton.  We  perceive 
by  this  statement  that  the  cost  of  the  iron  is  doubled 
in  reaching  us  from  the  mine  in  which  it  is  produced. 
In  other  words,  our  present  duty,  with  the  expense  of 
transportation,  gives  an  advantage  to  the  American, 
over  the  foreign  manufacturer,  of  100%.  Why  then 
cannot  the  iron  be  manufactured  at  home  ?  Our  ore  is 
said  to  be  as  good,  and  some  of  it  better.  It  is  under 
our  feet,  and  the  Chairman  of  the  Committee  tells  us 
that  it  might  be  wrought  by  persons  who  otherwise  will 
not  be  employed.  Why  then  is  it  not  wrought  ?  No- 
thing could  be  more  sure  of  constant  sale.  It  is  not  an 
article  of  changeable  fashion,  but  of  absolute,  permanent 
necessity,  and  such,  therefore,  as  would  always  meet  a 
steady  demand.  Sir,  I  thixik  it  would  be  well  for  the 
Chairman  of  the  Committee  to  revise  his  premises,  for 
I  am  persuaded  that  there  is  an  ingredient  properly  be- 
longing to  the  calculation  which  he  has  misstated  or 
omitted.  Swedes  iron  in  England  pays  a  duty,  I  think, 
of  about  $27  per  ton ;  yet  it  is  imported  in  considerable 
quantities,  notwithstanding  the  vast  capital,  the  excel- 
lent coal,  and,  more  important  than  all  perhaps,  the 
highly  improved  state  of  inland  navigation  in  England ; 
although  I  am  aware  that  the  English  use  of  Swedes 
iron  may  be  thought  to  be  owing  in  some  degree  to  its 
superior  quality. 

Sir,  the  true  explanation  of  this  appears  to  me  to  lie. 
in  the  different  }jrices  of  labor  ;  and  here  I  apprehend 


376  DANIEL  WEBSTER. 

is  the  grand  mistake  in  the  argument  of  the  Chairman 
of  the  Committee.  He  says  it  woukl  cost  the  nation, 
as  a  nation,  nothing  to  make  our  ore  into  iron.  Now,  I 
think  it  would  cost  us  precisely  that  which  we  can  worst 
afford ;  that  is,  great  labor.  Although  bar  iron  is  very 
properly  considered  a  raw  material  in  respect  to  its 
various  future  uses,  yet,  as  bar  iron,  the  principal  in- 
gredient in  its  cost  is  labor.  Of  manual  labor,  no  nation 
has  more  than  a  certain  quantity,  nor  can  it  be  increased 
at  will.  As  to  some  operations,  indeed,  its  place  may 
be  supplied  by  machinery  ;  but  there  are  other  services 
which  machinery  cannot  perform  for  it,  and  which  it 
must  perform  for  itself.  A  most  important  question 
for  every  nation,  as  well  as  for  every  individual,  to  pro- 
pose to  itself,  is,  how  it  can  best  apply  that  quantity  of 
labor  which  it  is  able  to  perform  ?  Labor  is  the  great 
producer  of  wealth ;  it  moves  all  other  causes.  If  it 
call  machinery  to  its  aid,  it  is  still  employed  not  only  in 
using  the  machinery,  but  in  making  it.  Now,  with  re- 
spect to  the  quantity  of  labor,  as  we  all  know,  diiferent 
nations  are  differently  circumstanced.  Some  need,  more 
than  anything,  work  for  hands,  others  require  hands 
for  work ;  and  if  we  ourselves  are  not  absolutely  in  the 
latter  class,  we  are  still,  most  fortunately,  very  near  it. 
I  cannot  find  that  we  have  those  idle  hands  of  which 
the  Chairman  of  the  Committee  speaks.  The  price  of 
labor  is  a  conclusive  and  unanswerable  refutation  of 
that  idea ;  it  is  known  to  be  higher  with  us  than  in  any 
other  civilized  state,  and  this  is  the  greatest  of  all 
proofs  of  general  happiness.  Labor  in  this  country  is 
independent  and  proud.  It  has  not  to  ask  the  patro- 
nage of  capital,  but  capital  solicits  the  aid  of  labor.  This 
is  the  general  truth  in  regard  to  the  condition  of  our 
whole  population,  although  in  the  large  cities  there  are, 
doubtless,  many  exceptions.  The  mere  capacity  to  labor 
in  common  agricultural  employments  gives  to  our  young 


SPEECH  OF  1824.  377 

men  the  assiirance  of  independence.  We  have  been 
asked,  sir,  by  the  Chairman  of  the  Committee,  in  a  tone 
of  some  pathos,  whether  we  will  allow  to  the  serfs  of 
Russia  and  Sweden  the  benefit  of  making  iron  for  us  ? 
Let  me  inform  the  gentleman,  sir,  that  those  same  serfs 
do  not  earn  more  than  seven  cents  a  day,  and  that  they 
work  in  these  mines  for  that  compensation  because 
they  are  serfs.  And  let  me  ask  the  gentleman  further, 
whether  we  have  any  labor  in  this  country  that  cannot 
be  better  employed  than  in  a  business  which  does  not 
yield  the  laborer  more  than  seven  cents  a  day  ?  This,  it 
appears  to  me,  is  the  true  question  for  our  consideration. 
There  is  no  reason  for  saying  that  we  will  work  iron 
because  we  have  mountains  that  contain  the  ore.  We 
might  for  the  same  reason  dig  among  our  rocks  for  the 
scattered  grains  of  gold  and  silver  which  might  be  found 
there.  The  true  inquiry  is,  can  we  produce  the  article 
in  a  useful  state  at  the  same  cost,  or  nearly  at  the  same 
cost,  or  at  any  reasonable  approximation  towards  the 
same  cost,  at  which  we  can  import  it. 

Some  general  estimates  of  the  price  and  profits  of 
labor  in  those  countries  from  which  we  import  our  iron 
might  be  formed  by  comparing  the  reputed  products 
of  different  mines  and  their  prices  with  the  number  of 
hands  employed.  The  mines  of  Danemora  are  said  to 
yield  about  4,000  tons,  and  to  employ  in  the  mines 
1,200  workmen.  Suppose  this  to  be  worth  $50  per  ton ; 
any  one  will  find  by  computation  that  the  whole  pro- 
duct would  not  pay  in  this  country  for  one  quarter  part 
of  the  necessary  labor.  The  whole  export  of  Sweden 
was  estimated,  a  few  years  ago,  at  400,000  ship-pounds, 
or  about  54,000  tons.  Comparing  this  product  with  the 
number  of  workmen  usually  supposed  to  be  employed 
in  the  mines  which  produce  iron  for  exportation,  the 
result  will  not  greatly  differ  from  the  foregoing.  These 
estimates  are  general,  and  might  not  conduct  us  to  a 


378  DANIEL  WEBSTER. 

precise  result ;  but  we  kuow,  from  intelligent  travelers 
and  eye-witnesses,  that  the  price  of  labor  in  the  Swedish 
mines  does  not  exceed  seven  cents  a  day.^ 

The  true  reason,  sir,  why  it  is  not  our  policy  to  com- 
pel our  citizens  to  manufacture  our  own  iron  is,  that 
they  are  far  better  employed.  It  is  an  unproductive 
business,  and  they  are  not  poor  enough  to  be  obliged  to 
follow  it.  If  we  had  more  of  poverty,  more  of  misery, 
and  something  of  servitude,  if  we  had  an  ignorant,  idle, 
starving  population,  we  might  set  up  for  iron  makers 
against  the  world. 

The  committee  will  take  notice,  Mr.  Chairman,  that, 
under  our  present  duty,  together  with  the  expense  of 
transportation,  our  manufacturers  are  able  to  supply 
their  own  immediate  neighborhood ;  and  this  proves 
the  magnitude  of  that  substantial  encouragement  which 
these  two  causes  concur  to  give.  There  is  little  or  no 
foreign  iron,  I  presume,  used  in  the  county  of  Lancaster. 
This  is  owing  to  the  heavy  expense  of  land  carriage ; 
and  as  we  recede  farther  from  the  coast,  the  manufac- 
turers are  still  more  completely  secured,  as  to  their  own 
immediate  market,  against  the  competition  of  the  im- 

^  The  price  of  labor  in  Russia  may  be  pretty  well  collected  from 
Tooke's  View  of  the  Russian  Empire.  "  The  workmen  in  the  mines 
and  the  fonnderies  are,  indeed,  all  called  master-people  ;  but  they 
distinguish  themselves  into  masters,  undermasters,  apprentices,  delvers, 
servants,  carriers,  washers,  and  separators.  In  proportion  to  their 
ability  their  wages  are  regulated,  which  proceed  from  15  to  upwards 
of  30  roubles  per  annum.  The  provisions  which  they  receive  from 
the  magazines  are  deducted  from  tliis  pay."  The  value  of  the  rouble 
at  that  time  (17U9)  was  about  24  pence  sterling,  or  45  cents  of  our 
money. 

"  By  the  edict  of  1799,"  it  is  added,  "  a  laborer  with  a  horse  shall 
receive,  daily,  in  summer  20  and  in  winter  12  copecks ;  a  laborer 
without  a  horse,  in  summer  10,  in  winter  8  copecks." 

A  copeck  is  the  hundredth  part  of  a  rouble,  or  about  half  a  cent 
of  our  money.  The  price  of  labor  may  have  risen,  in  some  degree, 
since  that  period,  but  probably  not  much. 


SPEECH  OF  1824.  379 

ported  article.  But  what  they  ask  is  to  be  allowed  to 
supply  the  seacoast,  at  such  a  price  as  shall  be  formed 
by  adding  to  the  cost  at  the  mines  the  expense  of  land 
carriage  to  the  sea ;  and  this  appears  to  me  most  unrea- 
sonable. The  effect  of  it  would  be  to  compel  the  con- 
sumer to  pay  the  cost  of  two  land  transportations  ;  for, 
in  the  first  place,  the  price  of  iron,  at  the  inland  fur- 
naces, will  always  be  found  to  be  at,  or  not  much  below, 
the  price  of  the  imported  article  in  the  seaport,  and  the 
cost  of  transportation  to  the  neighborhood  of  the  fur- 
nace ;  and  to  enable  the  home  product  to  hold  a  com- 
petition with  the  imported  in  the  seaport,  the  cost  of 
another  transportation  downward,  from  the  furnace  to 
the  coast,  must  be  added.  Until  our  means  of  inland 
commerce  be  improved,  and  the  charges  of  transporta- 
tion by  that  means  lessened,  it  appears  to  me  wholly 
impracticable,  with  such  duties  as  any  one  would  think 
of  proposing,  to  meet  the  wishes  of  the  manufacturers 
of  this  article.  Suppose  we  were  to  add  the  duty  pro- 
posed by  this  bill,  although  it  would  benefit  the  capital 
invested  in  works  near  the  sea,  and  the  navigable  rivers, 
yet  the  benefit  would  not  extend  far  in  the  interior. 
Where,  then,  are  we  to  stop,  or  what  limit  is  proposed 
to  us  ? 

The  freight  of  iron  has  been  afforded  from  Sweden  to 
the  United  States  as  low  as  $8  per  ton.  This  is  not 
more  than  the  price  of  fifty  miles'  land  carriage.  Stock- 
holm, therefore,  for  the  purpose  of  this  argument,  may 
be  considered  as  within  fifty  miles  of  Philadelphia. 
Now,  it  is  at  once  a  just  and  a  strong  view  of  this  case 
to  consider  that  there  are,  within  fifty  miles  of  our  mar- 
ket, vast  multitudes  of  persons  who  are  willing  to  labor 
in  the  production  of  this  article  for  us,  at  the  rate  of 
seven  cents  per  day,  while  we  have  no  labor  which  will 
not  command,  upon  the  average,  at  least  five  or  six  times 
that  amount.     The  question  is,  then,  shall  we  buy  this 


380  DANIEL  WEBSTEE. 

article  of  these  manufacturers,  and  suffer  our  own  labor 
to  earn  its  greater  reward,  or  shall  we  employ  our  own 
labor  in  a  similar  manufacture,  and  make  up  to  it  by 
a  tax  on  consumers  the  loss  which  it  must  necessarily 
sustain  ? 

I  proceed,  sir,  to  the  article  of  hemp.  Of  this  we  im- 
ported last  year,  in  round  numbers,  6,000  tons,  paying 
a  duty  of  $.30  a  ton,  or  $180,000  on  the  whole  amount; 
and  this  article,  it  is  to  be  remembered,  is  consumed 
almost  entirely  in  the  uses  of  navigation.  The  whole 
burden  may  be  said  to  fall  on  one  interest.  It  is  said 
we  can  produce  this  article  if  we  will  raise  the  duties. 
But  why  is  it  not  produced  now  ;  or  why,  at  least,  have 
we  not  seen  some  specimens  ?  for  the  present  is  a 
very  high  duty,  when  expenses  of  importation  are 
added.  Hemp  was  purchased  at  St.  Petersburg  last  year 
at  $101.67  per  ton.  Charges  attending  shipment,  &c., 
$14.25.  Freight  may  be  stated  at  $30  per  ton,  and  our 
existing  duty  is  $30  more.  .  These  three  last  sums  being 
the  charges  of  transportation,  amount  to  a  protection  of 
near  75%  in  favor  of  the  home  manufacturer,  if  there 
were  any  such.  And  we  ought  to  consider,  also,  that 
the  price  of  hemp  at  St.  Petersburg  is  increased  by  all 
the  expense  of  transportation  from  the  place  of  growth 
to  that  port ;  so  that  probably  the  whole  cost  (5f  trans- 
portation, from  the  j^lace  of  growth  to  our  market,  in- 
cluding our  duty,  is  equal  to  the  first  cost  of  the  article  ; 
or,  in  other  words,  is  a  j)rotection  in  favor  of  our  own 
product  of  100%. 

And  since  it  is  stated  that  we  have  great  quantities 
of  fine  land  for  the  production  of  hemp,  of  which  I  have 
no  doubt,  the  question  recurs,  why  is  it  not  produced  ? 
I  speak  of  the  water  rotted  hemp,  for  it  is  admitted  that 
that  which  is  dew  rotted  is  not  sufficiently  good  for  the 
requisite  purposes.  I  cannot  say  whether  the  cause  be' 
in  climate,  in  the  process  of  rotting,  or  what  else,  but 


SPEECH  OF  1824.  381 

the  fact  is  certain,  and  there  is  no  American  water 
rotted  hemp  in  the  market.  We  are  acting,  therefore, 
upon  a  hypothesis.  Is  it  not  reasonable  that  those  who 
say  that  they  can  produce  the  article  shall  at  least 
prove  the  truth  of  that  allegation  before  new  taxes  are 
laid  on  those  who  use  the  foreign  commodity  ?  Sup- 
pose this  bill  passes  :  the  price  of  hemp  is  immediately 
raised  f  14.80  per  ton,  and  this  burden  falls  immedi- 
ately on  the  ship  builder ;  and  no  part  of  it,  for  the 
present,  will  go  for  the  benefit  of  the  American  grower, 
because  he  has  none  of  the  article  that  can  be  used, 
nor  is  it  expected  that  much  of  it  will  be  produced  for 
a  considerable  time.  Still  the  tax  takes  effect  upon  the 
imported  article ;  and  the  ship  owners,  to  enable  the 
Kentucky  farmer  to  receive  an  additional  f  14.00  on  his 
ton  of  hemp,  whenever  he  may  be  able  to  raise  and 
manufacture  it,  pay,  in  the  mean  time,  an  equal  sum  per 
ton  into  the  Treasury  on  all  the  imported  hemp  which 
they  are  still  obliged  to  use  ;  and  this  is  called  "  pro- 
tection !  "  Is  this  just  or  fair  ?  A  particular  interest 
is  here  burdened,  not  only  for  the  benefit  of  another 
particular  interest,  but  burdened  also  beyond  that,  for 
the  benefit  of  the  Treasury.  It  is  said  to  be  important 
for  the  country  that  this  article  should  be  raised  in 
it ;  then  let  the  country  bear  the  expense,  and  pay 
the  bounty.  If  it  be  for  the  good  of  the  whole,  let  the 
sacrifice  be  made  by  the  whole,  and  not  by  a  part.  If 
it  be  thought  useful  and  necessary,  from  political  con- 
siderations, to  encourage  the  growth  and  manufacture 
of  hemp,  government  has  abundant  means  of  doing  it. 
It  might  give  a  direct  bounty,  and  such  a  measure 
would,  at  least,  distribute  the  burden  equally ;  or,  as 
government  itself  is  a  great  consumer  of  this  article,  it 
might  stipulate  to  confine  its  own  purchases  to  the 
home  product,  so  soon  as  it  should  be  shown  to  be  of 
the  proper  quality.     I  see  no  objection  to  this  proceed- 


382  DANIEL  WEBSTER. 

ing,  if  it  be  thought  to  be  an  object  to  encourage  the 
prockiction.  It  might  easily,  and  perhaps  properly,  be 
provided  by  law  that  the  navy  should  be  supplied 
with  American  hemp,  the  quality  being  good,  at  any 
price  not  exceeding,  by  more  than  a  given  amount,  the 
current  price  of  foreign  hemp  in  our  market.  Every- 
thing conspires  to  render  some  such  course  preferable 
to  the  one  now  proposed.  The  encouragement  in  that 
way  would  be  ample,  and,  if  the  experiment  should 
succeed,  the  whole  object  would  be  gained ;  and  if  it 
should  fail,  no  considerable  loss  or  evil  would  be  felt  by 
any  one. 

I  stated,  some  days  ago,  and  I  wish  to  renew  the 
statement,  what  was  the  amount  of  the  proposed  aug- 
mentation of  the  duties  on  iron  and  hemp,  in  the  cost  of 
a  vessel.  Take  the  case  of  a  common  ship,  of  300  tons, 
not  coppered,  nor  copper-fastened.  It  would  stand  thus, 
by  the  present  duties  :  — 

14|  tons   of   Iron,  for   hull,  rigging,  and   anchors,    at 

$15  per  ton       .         .         .   ^ $217.50 

10  tons  of  Hemp,  at  $30 300.00 

40  bolts  Russia  Duck,  at  $2 80.00 

20  bolts  Ravens  Duck,  at  $1.25 25.00 

On  articles  of  ship  chandlery,  cabin  furniture,  hardware, 

etc 40.00 

$G62..50 
The  bill  proposes  to  add  :  — 

$7.40  per  ton  on  Iron,  which  will  be       ...         •  $107-30 

$14.80  per  ton  on  Hemp,  equal  to       ...         .  148.00 
And  on  Duck,  by  the  late  amendment  of  the  bill,  say 

25  per  cent       ........  2o.00 

$280.30 

But  to  the  duties  on  iron  and  hemp  should  be  added 
those  paid  on  copper,  whenever  that  article  is  used. 
By  the  statement  which  I  furnished  the  other  day,  it 


SPEECH  OF  1824.  383 

appeared  that  the  duties  received  by  government,  on 
articles  used  in  the  construction  of  a  vessel  of  359  tons, 
with  copper  fastenings,  amounted  to  $1,056.  With  the 
augmentations  of  this  bill,  they  would  be  equal  to 
$1,400.  Now,  I  cannot  but  flatter  myself,  Mr.  Chair- 
man, that,  before  the  committee  will  consent  to  this 
new  burden  upon  the  shipping  interest,  it  will  very 
deliberately  weigh  the  probable  consequences.  I  would 
again  urgently  solicit  its  attention  to  the  condition  of 
that  interest.  We  are  told  that  Government  has  pro- 
tected it,  by  discriminating  duties,  and  by  an  exclusive 
right  to  the  coasting  trade.  But  it  would  retain  the 
coasting  trade,  by  its  own  natural  efforts,  in  like  man- 
ner, and  with  more  certainty,  than  it  now  retains  any 
portion  of  foreign  trade.  The  discriminating  duties  are 
now  abolished,  and  while  they  existed  they  were  no- 
thing more  than  countervailing  measures,  not  so  much 
designed  to  give  our  navigation  an  advantage  over  that 
of  other  nations  as  to  put  it  upon  an  equality ;  and  we 
have,  accordingly,  abolished  ours,  when  they  have  been 
willing  to  abolish  theirs.  Look  to  the  rate  of  freights. 
Were  they  ever  lower,  or  even  so  low  ?  I  ask  gentle- 
men who  know,  whether  the  harbor  of  Charleston,  and 
the  river  of  Savannah,  be  not  crowded  with  ships 
seeking  employment,  and  finding  none  ?  I  would  ask 
the  gentlemen  from  Xew  Orleans  if  their  magnificent 
Mississippi  does  not  exhibit,  for  furlongs,  a  forest  of 
masts  ?  The  condition,  sir,  of  the  shipping  interest  is 
not  that  of  those  who  are  insisting  on  high  profits,  or 
struggling  for  monopoly  ;  but  it  is  the  condition  of  men 
content  with  the  smallest  earnings,  and  anxious  for 
their  bread.  The  freight  of  cotton  has  formerly  been 
three  pence  sterling  from  Charleston  to  Liverpool  in 
time  of  peace.  It  is  now  I  know  not  what,  or  how 
many,  fractions  of  a  penny;  I  think,  however,  it  is 
stated   at  five  eighths.     The   producers,  then,  of   this 


384  DANIEL  WEBSTER. 

great  staple,  are  able,  by  means  of  this  navigation,  to 
send  it,  for  a  cent  a  pound,  from  their  own  doors  to  the 
best  market  in  the  Avorld. 

Mr.  Chairman,  I  will  now  only  remind  the  committee 
that,  while  we  are  proposing  to  add  new  burdens  to  the 
shipping  interest,  a  very  different  line  of  policy  is  fol- 
lowed by  our  great  commercial  and  maritime  rival.  It 
seems  to  be  announced  as  the  sentiment  of  the  Govern- 
ment of  England,  and  undoubtedly  it  is  its  real  senti- 
ment, that  the  first  of  all  manufactures  is  the  manu- 
facture of  ships.  A  constant  and  wakeful  attention  is 
paid  to  this  interest,  and  very  important  regulitions, 
favorable  to  it,  have  been  adopted  within  the  last  year, 
some  of -which  I  will  beg  leave  to  refer  to,  with  the 
hope  of  exciting  the  notice,  not  only  of  the  committee, 
but  of  all  others  who  may  feel,  as  I  do,  a  deep  interest 
in  this  subject.  In  the  first  place,  a  general  amendment 
has  taken  place  in  the  register  acts,  introducing  many 
new  provisions,  and,  among  others,  the  following  :  — 

A  direct  mortgage  of  the  interest  of  a  ship  is  allowed, 
without  subjecting  the  mortgagee  to  the  responsibility 
of  an  owner. 

The  proportion  of  interest  held  by  each  owner  is  ex- 
hibited in  the  register,  thereby  facilitating  both  sales 
and  mortgages,  and  giving  a  new  value  to  shipping 
among  the  moneyed  classes. 

Shares,  in  the  ships  of  copartnerships,  may  be  regis- 
tered as  joint  property,  and  subject  to  the  same  rules 
as  other  partnership  effects. 

Ships  may  be  registered  in  the  name  of  trustees,  for 
the  benefit  of  joint  stock  companies ;  and  many  other 
regulations  are  adopted  with  the  same  general  view  of 
rendering  the  mode  of  holding  the  property  as  con- 
venient and  as  favorable  as  possible. 

By  another  act,  British  registered  vessels,  of  every  de- 
scrix3tion,  are  allowed  to  enter  into  the  general  and  the 


SPEECH  OF  1824.  385 

coasting  trade  in  the  India  seas,  and  may  now  trade  to 
and  from  India,  with  any  part  of  tlie  world,  except  China. 

By  a  third,  all  limitations  and  restrictions,  as  to  lati- 
tude and  longitude,  are  removed  from  ships  engaged  in 
the  Southern  whale  fishery.  These  regulations,  I  pre- 
sume, have  not  been  made  without  first  obtaining  the 
consent  of  the  East  India  Company  ;  so  true  is  it  found, 
that  real  encouragement  of  enterprise  oftener  consists, 
in  our  days,  in  restraining  or  buying  off  monopolies  and 
prohibitions,  than  in  imposing  or  extending  them. 

The  trade  with  Ireland  is  turned  into  a  free  coasting 
trade  ;  light  duties  have  been  reduced,  and  various  other 
beneficial  arrangements  made,  and  still  others  proposed. 
I  might  add,  that,  in  favor  of  general  commerce,  and 
as  showing  their  confidence  in  the  principles  of  liberal 
intercourse,  the  British  government  has  perfected  the 
warehouse  system,  and  authorized  a  reciprocity  of 
duties  with  foreign  states,  at  the  discretion  of  the 
Privy  Council. 

This,  sir,  is  the  attention  which  our  great  rival  is 
paying  to  these  important  subjects,  and  we  may  assure 
ourselves  that,  if  we  do  not  keep  alive  a  proper  sense 
of  our  own  interests,  she  will  not  only  beat  us,  but  will 
deserve  to  beat  us. 

Sir,  I  Avill  detain  you  no  longer.  There  are  some 
parts  of  this  bill  which  I  highly  approve;  there  are 
others  in  which  I  should  acquiesce ;  but  those  to  which 
I  have  now  stated  my  objections  appear  to  me  so  desti- 
tute of  all  justice,  so  burdensome  and  so  dangerous  to 
that  interest  which  has  steadily  enriched,  gallantly  de- 
fended, and  proudly  distinguished  us,  that  nothin^j  can 
prevail  upon  me  to  give  it  my  support. 


DATE  DUE 


